How to make money from renting real estate: what to choose, a new building at the "pit" stage or an apartment in a secondary market?

Real estate investments remain a reliable way to preserve capital. Find out what is more profitable - new construction or resale, and how to minimize the risks of buying

Legal advice for Ukrainians

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Real estate investments remain one of the most popular ways to protect capital and receive a stable income. However, the investor always faces the question: what is more profitable - to buy an apartment in a new building at the excavation stage or to choose a ready-made option on the secondary market that can be rented out today?

The analysis of this issue was conducted by Finance.ua experts, comparing the two strategies from the standpoint of profitability, risks and ease of asset management. We will tell you about the advantages and disadvantages of each of the methods in this article.

Read here where the greatest demand for apartments is observed and how the activity of Ukrainians has changed compared to last year.

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Buying an apartment in a new building at the excavation stage

Investments in the early stages of construction always arouse increased interest among Ukrainians, because that is when you can get the maximum profit potential, but it is important to understand all the advantages and risks of such a decision.

Advantages of investing in new buildings

Buying an apartment in a new building during the construction phase traditionally attracts investors with a low starting price and the potential for value growth after the building is put into operation. Developers offer significant discounts, installments or special financing conditions. In a year or two, the cost of a square meter can increase by 15-30%, which opens up the opportunity to either resell the housing at a profit or rent it out at a higher rental rate.

Another advantage is flexibility in choice. At the initial stage of construction, you can choose the best layout, floor, window orientation or location in the building, which will increase the attractiveness of the apartment for future tenants. Such parameters sometimes significantly affect the rental rate and the speed of housing delivery.

In addition, buying on a pit often allows you to apply the financial “leverage effect”. If the investor pays in installments, and the price increases in the process, he actually receives a profit on the capital invested. This makes the strategy interesting for those who seek maximum capital growth and are willing to wait.

Risks of investment in construction

Despite its prospects, investments at the early stage of construction have their own risks. The most obvious is the delay or freezing of the project. Even in a stable market, there are cases when construction is stopped due to lack of financing or legal disputes. In such a case, the investor's capital is "frozen" without the possibility of receiving rental income, and the payback period itself increases significantly.

It is equally important to take into account market fluctuations. If housing prices fall during construction, the expected increase may disappear, and the cost of the apartment may remain lower than forecast. In addition, the investor will have to invest additional funds in repairs and improvements to the housing before renting it out, which increases the final investment amount.

The risks also include legal nuances. It is worth carefully checking the reputation of the developer, the availability of all permits and the legality of financing schemes (in particular, escrow accounts). And, of course, take into account that until the object is completed, it is difficult to sell it - the liquidity of such an investment is low.

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Secondary market: more stability and quick income

Buying a ready-made apartment on the secondary market is a choice in favor of predictability. The owner can immediately rent out the housing and receive monthly income. This is especially important for investors who count on regular cash flow or have obligations that require stable income.

Unlike new buildings, there is no time risk here: the apartment is already ready for use, and you can realistically assess its condition, repairs, utility costs and the potential level of demand in a particular area. It is also easier to calculate real profitability on the secondary market - the average annual yield of rental real estate in Ukrainian cities is 6-8% of the asset value, depending on the location and condition of the apartment.

Another plus is liquidity. If there is a need to sell an apartment, it can be done faster than with an unfinished object. Demand for “ready-made housing” with renovation remains stable, especially in large cities, where tenants value comfort and the readiness to “move in and live.”

What to look out for when buying a second-hand property

However, the secondary market also has its challenges. The main one is the higher price per square meter. You are buying not only housing, but also the profit already realized by the previous owner. The potential for growth in the value of such an apartment is limited, so the main income is formed precisely through rent.

In addition, even a “ready-made” apartment needs updating. Over time, repairs lose relevance, communications wear out, and appliances need to be replaced. These costs should be included in the calculation of net profitability. It is no less important to check the documents: ownership history, absence of litigation or encumbrances. Negligent tenants, hidden defects or legal nuances can be an unpleasant surprise.

In recent years, the private real estate market in Ukraine has undergone significant changes: in some regions the cost of houses has increased rapidly, in others it has remained almost unchanged. In which regions housing has become more expensive, and where it has remained affordable, we will tell you in this material.

What real estate is profitable to buy for rent: a brief comparative analysis

The choice between a new building and a secondary one depends primarily on the investor's goal.

- If the main thing is quick income and minimal risks, the secondary market will be optimal. You are buying a ready-made asset that immediately brings money, and its profitability can be accurately predicted.

- If the priority is capital growth in the future 2–3 years, a new building at the excavation stage can provide profit due to the difference between the starting and final price.

Conventionally, an apartment with an area of ​​​​50 m², purchased at the construction stage for 60 thousand dollars, after commissioning can cost 72 thousand dollars - that is, the increase is 20%. At the same time, a secondary one, purchased for 75 thousand dollars and rented for 600 dollars per month, brings about 7–8% per annum on the invested funds. Both options make sense - they simply satisfy different investment needs.

How to minimize risks when buying real estate?

Experienced investors advise not to bet on only one type of asset. A combined strategy allows you to balance risks: invest some of the funds in ready-made housing for a stable income, and some in a new building to receive profit from capital growth.

This approach helps to create a “portfolio balance” between cash flow and potential value growth.

Also, before any purchase, it is worth conducting a detailed audit:

- Check the reputation of the developer or owner;

- Estimate the full cost of ownership (repairs, furniture, taxes, insurance);

- Set aside a reserve for unforeseen expenses (at least 5–10% of the cost of the apartment per year);

- Determine a clear exit strategy - when and under what conditions you plan to sell or reinvest the asset.

Legal support from Visit Ukraine specialists will help secure your real estate transaction at every stage – from document verification to signing the contract. Experts analyze all legal risks so that you can invest confidently and without unnecessary worries. Get professional support and make each investment as safe as possible.

There is no universal solution, which is better – a foundation pit or a secondary one. It all depends on your goals, patience and willingness to take risks. If you are looking for a stable income today – choose a secondary one with ready-made repairs. If you are ready to wait for the sake of potentially higher profits – investing in a new building can be a good choice.

The main thing is to approach the purchase not emotionally, but strategically: analyze, calculate, check. After all, in the real estate market, it is not those who act quickly who make money, but those who think ahead.

Remember: even the best real estate needs protection!

On the Visit Ukraine platform, you can apply for express home insurance online - it is fast, official and will help preserve your investments in case of unforeseen events. Protect your home and sleep peacefully, knowing that your asset is in safe hands.

Let us remind you! Ukrainians are gradually returning to buying housing, despite the war and economic instability. We have already told you which objects are the most popular, what budgets buyers set aside and what influences the choice between a new building and a “secondary” one.

Photo – Freepik.com

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