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Updated almost 6 years ago, 01/10/2019
Residential Property in Moscow: facts, figures, tips.
Residential property: Net annual interest income can be considered as an excellent lie in a range of
from 6% to 7%. (Commercial property: from 12% to 14%).
(That’s my first article here. I live and work in Moscow. The information below is coming from my own experience. (I’m on my way in English language)).
In this post I discuss:
1. The perfect picture of the perfect tenant. (What they are looking for, and how much money they have)
2. Areas features of Moscow.
Let’s start!
In Moscow, your perfect tenant looks like a family with one child. (Age range of parents: from 28 y.o. to 38y.o., child from 3 y.o.). Property that meets the demands of that type of family meets the widest demand in the market.
Child is the best area anchor, This is a consequence of the education system in Russia. There is no division into primary school and secondary school as a different building. From 3 to 6 y.o. child will be in preschool (named literally “garden” in Russian). It is very difficult to get to kindergarten and no one wants to change the place. Then from 7 to 18 y.o adolescent will be in school.
Metro is the most important transport in Moscow. All social groups use the metro. At rush hour time intervals are only 50 seconds. Usually, it is 1.5 minutes. Stations are extremely clean and beautiful. If you want to be somewhere in time you must use the metro. The ideal location is in 5-8 minutes in a walk to the metro.
The best ecology is in the northwest, west, southwest part of the city. Never buy a property on the east!
In Moscow there is no organized armed crime, there is no legal opportunity to buy a lethal handgun. You feel safe in Moscow, but there are socially disadvantaged areas where is a greater risk of being robbed. Avoid these areas: 1. Golyanovo 2. Izmailovo 3. Kuzminki 4.Vykino-zulebino 5.Chertanovo 6.Konkovo
Usually an average family with one child is looking for compact 2 rooms flat (I want to specify, in Russia 2 rooms flat does not mean 2 bedrooms plus one living room, that is 2 rooms + kitchen + bathroom). Below you can see the plan of the most popular apartment:
Usually such apartments have from 480sqf to 510sqf. This is economy class housing. It looks like:
the interior of flat in that building usually looks like this:
The average family in Moscow has an income from 20.000$ p.y. to 35.000$ p.y. and they are able to pay a month from 550$ to 1000$.
Summarizing:
We need a 2 room 500sqf flat with worth under 180.000$ in 5-8 minutes in a walk to the metro. It should be located in the northwest, west, southwest part of the city.
Good deals on the market we can find from 110.000$
The apartment with the location and price like this has no problems with long-term rent.
Never buy luxury real estate, because Russia hasn’t a lot of luxury peoples.
Not sure what the purpose of this post is. Are you seeking US investors for Moscow real estate?
How do property rights hold up for American landlords in a country that is at enmity with the US?
Having spent a couple of months in Moscow in the winter of '85 (in fact Chernenko had died earlier that year), I admire your ability to live there let alone actively invest in old world infrastructure. The winter pollution at the time with constantly running diesel vehicles & coal burning heating systems was both eye watering & lung searing. But the metro was impressive.
Good luck!!
Originally posted by @Account Closed:
Not sure what the purpose of this post is. Are you seeking US investors for Moscow real estate?
How do property rights hold up for American landlords in a country that is at enmity with the US?
Good day Jonny! I want to find out opinions, views, and judgment and assess the prospects for working with US investors.
Under Russian law, any foreign national on an equal basis with resident has no restriction in the area of property rights. You have the right to manage, own and use your private property in Russia.
You have a right to establish a legal entity that operates under Russian jurisdiction. For example, Russian variant of LLC named "OOO" sounds shortly like triple English "o". You can have one founder and that person may be a CEO at the same time. You can manage your "OOO" remotely. Federal tax service of Russia and all the banks have an English interface.
The most attractive is the tax rate. If your company's revenue per year is less than $ 2,250,000 (two million dollars ) or 150 000 000 RUB, You can use the simplified taxation system with only 6% tax. Name of that tax mode sounds in Russian “U-S-N” (Tax is paid on income). We always use this system for rental business in Russia. Dividends tax is 15%.
Originally posted by @Pat L.:
Having spent a couple of months in Moscow in the winter of '85 (in fact Chernenko had died earlier that year), I admire your ability to live there let alone actively invest in old world infrastructure. The winter pollution at the time with constantly running diesel vehicles & coal burning heating systems was both eye watering & lung searing. But the metro was impressive.
Good luck!!
Sincerely thank you!
Moscow 85’ is extremely different from Moscow 2019. Coal burning heating systems no longer exists.
In order of correctly understand the essence of the current heating system:
In Moscow, 15 giant thermal power plants. They work on propane. Heat distribution goes throughout the city.
Now they are clean, no more coal at all. 90% of cars in Moscow are European, American, Japanese, etc, shortly no Russian.
As for old world infrastructure, there are many categories that are financially effective. Many unshapely buildings turn out to be better than budget new buildings and local people know it.
Old world buildings in Moscow:
1. Buildings of the Stalin period for senior officials. (Photo below). Unbreakable buildings with walls more than a meter thick. Large apartments, high ceilings, spacious entrances. Very valued in the market as apartments for a comfortable life. Absolutely soundproof walls.
2. Usual buildings of Stalin period. Good sound insulation, high ceilings, high quality. This is feasible, but it is difficult to find a good investment option. (Due to the high price)
3. Buildings of Brezhnev period. (Most popular rental buildings).
4. Buildings of Khrushchev period (The cheapest buildings in Moscow). Nobody wants to live there.
Originally posted by @Vsevolod Tokarev:
Residential property: Net annual interest income can be considered as an excellent lie in a range of
from 6% to 7%. (Commercial property: from 12% to 14%).
(That’s my first article here. I live and work in Moscow. The information below is coming from my own experience. (I’m on my way in English language)).
In this post I discuss:
1. The perfect picture of the perfect tenant. (What they are looking for, and how much money they have)
2. Areas features of Moscow.
Let’s start!
In Moscow, your perfect tenant looks like a family with one child. (Age range of parents: from 28 y.o. to 38y.o., child from 3 y.o.). Property that meets the demands of that type of family meets the widest demand in the market.
Child is the best area anchor, This is a consequence of the education system in Russia. There is no division into primary school and secondary school as a different building. From 3 to 6 y.o. child will be in preschool (named literally “garden” in Russian). It is very difficult to get to kindergarten and no one wants to change the place. Then from 7 to 18 y.o adolescent will be in school.
Metro is the most important transport in Moscow. All social groups use the metro. At rush hour time intervals are only 50 seconds. Usually, it is 1.5 minutes. Stations are extremely clean and beautiful. If you want to be somewhere in time you must use the metro. The ideal location is in 5-8 minutes in a walk to the metro.
The best ecology is in the northwest, west, southwest part of the city. Never buy a property on the east!
In Moscow there is no organized armed crime, there is no legal opportunity to buy a lethal handgun. You feel safe in Moscow, but there are socially disadvantaged areas where is a greater risk of being robbed. Avoid these areas: 1. Golyanovo 2. Izmailovo 3. Kuzminki 4.Vykino-zulebino 5.Chertanovo 6.Konkovo
Usually an average family with one child is looking for compact 2 rooms flat (I want to specify, in Russia 2 rooms flat does not mean 2 bedrooms plus one living room, that is 2 rooms + kitchen + bathroom). Below you can see the plan of the most popular apartment:
Usually such apartments have from 480sqf to 510sqf. This is economy class housing. It looks like:
the interior of flat in that building usually looks like this:
The average family in Moscow has an income from 20.000$ p.y. to 35.000$ p.y. and they are able to pay a month from 550$ to 1000$.
Summarizing:
We need a 2 room 500sqf flat with worth under 180.000$ in 5-8 minutes in a walk to the metro. It should be located in the northwest, west, southwest part of the city.
Good deals on the market we can find from 110.000$
The apartment with the location and price like this has no problems with long-term rent.
Never buy luxury real estate, because Russia hasn’t a lot of luxury peoples.
Financing options for non-Russia resident?
Any advantage to investing in Moscow as opposed to another place in Europe?
I think your post is great. As a fellow Russian I appreciate and had a chuckle at the last line in your post. Be careful when you say "this has no problems with long-term rent" because I don't think you want to stand by that statement. You cannot put a guarantee on that.
It worth to point out buildings of Brezhnev period for senior officials. Not very beautiful, but very high-quality buildings. You can find good options for investing.
@Vsevolod Tokarev I have a friend that lives in Moscow. Send me a message. Are the returs good there? He is a citizen and so is all of his family.
- Jordan Moorhead
- [email protected]
- 512-888-9122
Originally posted by @Jordan Moorhead:
@Vsevolod Tokarev @Grigoriy Gorshteyn
As for residential property, it is real to find and close a deal with property that has 6,5% annual income. Property price from 110.000$ to 160.000$. This is very conservative and understandable.
The really excellent result I think from 12,6% to 13,4% in annual income you can get after having bought commercial street-retail property. With regards to this type of property, there are much more conditions for a good deal. This is due to the Russian legislation concerning enterprises engaged in the food industry, tobacco trade or alcohol. Everything is important: Type of ventilation system, power network capacity, Ceiling height etc. Under Russian law, only a narrow circle of enterprises will be able to work in a certain space. (This is a real topic for a very large separate post.) I now that a good deal in this segment can be found starting from 260.000$. There is no imaginary ceiling for the price. The only difference is in strategy. The bulk of the proposal accumulates from 400.000$ to 1.2M$
I'll contact you.
Originally posted by @Vsevolod Tokarev:
Andrey Y
Yes! A good investor does not put all the eggs in one basket). All that you have in Russia, no one from the United States cannot get. An official request won't help either. I think it is reasonable to have passive income from completely different countries.
Could you type that in Russian?
"All that you have in Russia, no one from the United States cannot get. An official request won't help either." This statement is a bit confusing. The double negative there is strange wording.
I want to show you the Moscow elite real estate. It is not worth investing in it. But living in is nice.
Due to low liquidity and demand, prices are good, but this is for personal use only!
For instance: "triumph palace living building"
the flat in it (740sqf and 1,3m$)
Andrey Y. Of course.
"Translit.": ( Russkuy raskladku forum ne vosprinimaet. Ya hochy uvideti I ponyati otnochenie americanscih investorov k russkoi nedvizimosti. Vosmoznii interes predpolagau v clutche diversificacii activov, imell vvidu uridichesci-finansovie risci, takie kak razvod, sudebnie shtrafi, ili hudchie scenarii... Americanscoe zaconodatelstvo ochibok ne prochaet. ya dumay imeet mesto dumat o chernom dne daje esli ti v us. A chto naschet rommercheskoi nedvizimosti, tam realno v rossii mogno delat ocheni chorochie resultati.)
I am now anderstnading that my phrase "no one from the United States cannot get" has incorrect sense in English. I mean the power of foreign law for Russia has no judicial sense. This feature makes similar countries like separate planets.
Чтобы инвестировать куда то, надо знать предмет досконально.
Invest in what you know, know what you invest into.
Russia is very risky investment, especially for Americans
Originally posted by @Irina Belkofer:
Чтобы инвестировать куда то, надо знать предмет досконально.
Invest in what you know, know what you invest into.
Russia is very risky investment, especially for Americans
Yep. Russia is not a plunge I am willing to take ;)