2021•Municipal economy of citiesOpen access

RESEARCHING THE RATE OF PROFIT FOR REAL ESTATE IN THE CITY

Сергій Кобзан, V. Borodatuk, Olena Pomortseva

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Abstract

The purpose of the article is to conduct research on the value of different segments of residential real estate in the city economy, rental rates. Based on this, determine the rate of return on the location of each investigated segment of real estate. The researches of the residential real estate market of the city of Kharkiv on the certain areas are carried out. The market value of one-room, two-room, and three-room apartments is calculated. The cost of rent for one-room, two-room, and three-room apartments is determined. Studies have been conducted and the rate of return calculated in relation to the location of each of the segments of residential real estate. Conclusions are made about the prospects for the development of the residential real estate market in the city economy, options for investing in real estate in the city and the best return on real estate. Today, the problem of profitability research when investing in different segments of real estate and real estate that differ in location is very relevant. Determining the rate of return or rate of return is possible using the approaches used in valuation and using valuation techniques and procedures. The problem of investing is important for business development. Current issues are - in what area to invest and how to get the maximum profit. It is very important for business owners and ordinary citizens to know the amount of profit that can be obtained. Real estate investing is an important and profitable project to save and increase your own resources. Today, there are several methods for assessing the effectiveness of investment. One of them is to determine the rate of return on each of the investment options. The problem posed in the work is the search for locations for investment within the city of Kharkiv with the maximum profit. As a result of research it was established: the average cost of 1 - bedroom apartments = $ 32,564; the average cost of 2 - bedroom apartments = 48385 $; the average cost of 3 - bedroom apartments = $ 65,849; average rent = $ 7; average selling price of 1 sq. km. m = $ 849; average rate of return = 10%. The minimum rental price per 1 sq. кm. m. in the areas of HTZ, Rogan, the village of East - $ 5, and the maximum cost in the areas of Center, Nagorny, Derzhprom - $ 10. Thus we see that those areas of the city in which the rate of return exceeds the average in Kharkov. Thus, the most favorable areas for investment are the areas of the beginning of Gagarin Avenue - 11.29%; Central Market, South Station - 12.36%; Zhukovsky, Shishkovka - 11.34%; Novozhanovo, Moskalivka - 11.76% and Saltivka - 11.17%.

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The purpose of the article is to conduct research on the value of different segments of residential real estate in the city economy, rental rates. Based on this, determine the rate of return on the location of each investigated segment of real estate. The researches of the residential real estate market of the city of Kharkiv on the certain areas are carried out. The market value of one-room, two-room, and three-room apartments is calculated. The cost of rent for one-room, two-room, and three-room apartments is determined. Studies have been conducted and the rate of return calculated in relation to the location of each of the segments of residential real estate. Conclusions are made about the prospects for the development of the residential real estate market in the city economy, options for investing in real estate in the city and the best return on real estate. Today, the problem of profitability research when investing in different segments of real estate and real estate that differ in location is very relevant. Determining the rate of return or rate of return is possible using the approaches used in valuation and using valuation techniques and procedures. The problem of investing is important for business development. Current issues are - in what area to invest and how to get the maximum profit. It is very important for business owners and ordinary citizens to know the amount of profit that can be obtained. Real estate investing is an important and profitable project to save and increase your own resources. Today, there are several methods for assessing the effectiveness of investment. One of them is to determine the rate of return on each of the investment options. The problem posed in the work is the search for locations for investment within the city of Kharkiv with the maximum profit. As a result of research it was established: the average cost of 1 - bedroom apartments = $ 32,564; the average cost of 2 - bedroom apartments = 48385 $; the average cost of 3 - bedroom apartments = $ 65,849; average rent = $ 7; average selling price of 1 sq. km. m = $ 849; average rate of return = 10%. The minimum rental price per 1 sq. кm. m. in the areas of HTZ, Rogan, the village of East - $ 5, and the maximum cost in the areas of Center, Nagorny, Derzhprom - $ 10. Thus we see that those areas of the city in which the rate of return exceeds the average in Kharkov. Thus, the most favorable areas for investment are the areas of the beginning of Gagarin Avenue - 11.29%; Central Market, South Station - 12.36%; Zhukovsky, Shishkovka - 11.34%; Novozhanovo, Moskalivka - 11.76% and Saltivka - 11.17%.

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Available abstract

The purpose of the article is to conduct research on the value of different segments of residential real estate in the city economy, rental rates. Based on this, determine the rate of return on the location of each investigated segment of real estate. The researches of the residential real estate market of the city of Kharkiv on the certain areas are carried out. The market value of one-room, two-room, and three-room apartments is calculated. The cost of rent for one-room, two-room, and three-room apartments is determined. Studies have been conducted and the rate of return calculated in relation to the location of each of the segments of residential real estate. Conclusions are made about the prospects for the development of the residential real estate market in the city economy, options for investing in real estate in the city and the best return on real estate. Today, the problem of profitability research when investing in different segments of real estate and real estate that differ in location is very relevant. Determining the rate of return or rate of return is possible using the approaches used in valuation and using valuation techniques and procedures. The problem of investing is important for business development. Current issues are - in what area to invest and how to get the maximum profit. It is very important for business owners and ordinary citizens to know the amount of profit that can be obtained. Real estate investing is an important and profitable project to save and increase your own resources. Today, there are several methods for assessing the effectiveness of investment. One of them is to determine the rate of return on each of the investment options. The problem posed in the work is the search for locations for investment within the city of Kharkiv with the maximum profit. As a result of research it was established: the average cost of 1 - bedroom apartments = $ 32,564; the average cost of 2 - bedroom apartments = 48385 $; the average cost of 3 - bedroom apartments = $ 65,849; average rent = $ 7; average selling price of 1 sq. km. m = $ 849; average rate of return = 10%. The minimum rental price per 1 sq. кm. m. in the areas of HTZ, Rogan, the village of East - $ 5, and the maximum cost in the areas of Center, Nagorny, Derzhprom - $ 10. Thus we see that those areas of the city in which the rate of return exceeds the average in Kharkov. Thus, the most favorable areas for investment are the areas of the beginning of Gagarin Avenue - 11.29%; Central Market, South Station - 12.36%; Zhukovsky, Shishkovka - 11.34%; Novozhanovo, Moskalivka - 11.76% and Saltivka - 11.17%.

Key concepts: Real estate, Income approach, Capitalization rate, Valuation (finance), Cost approach, Renting, Business, Profitability index

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