ROI

ROI - Return on investment in real estate as an investment

Do you want to invest your money? Achieve good returns on an investment?

But what is it really about when calculating the return on a property? Actually it is simple. It is nothing else than the relation of invested capital and achieved profit, the so-called return on capital. 

Our job? We let you understand which key points you should consider when buying a property in Egypt, so that your investment is and remains lucrative.

Many know KPI's or ROI from economics. There it stands for the calculation of the so-called "capital turnover". However, ROI is hardly suitable for use on its own in the real estate sector, as it is tied to monetary key figures that are subject to a periodic reference. Yes, of course, real estate also has direct costs. However, the indirect factors and investment risks involved in acquiring a property are often not taken into account.These are above all for Europeans in Egypt still much more heavily to estimate, because hardly someone spends more than few weeks vacation in our beautiful country, before he thinks about a real estate purchase.

What investors should look out for in foreign real estate:

Of course, real estate is in vogue. Also real estates in Egypt. The beautiful weather and an almost year-round guarantee of good weather attract tourists and real estate buyers to the country. At first glance, this promises secure income and high returns. A dreamlike return on investment which can be seen. But here at the Red Sea the motto applies too: Not all real estate is the same.

The ROI of a property at the Red Sea does not only depend on the location, the size, the year of construction and the equipment and finally also not only on the rental yield, but requires an extended risk analysis and an estimation of the total constellation from all these key figures.

As a rough starting point to even think about an investment property, you can, however, take the gross yield as a basis. However, this should also be based on market knowledge and not on assumptions.

Our beachfront rental service and the management of the properties entrusted to us strengthen our market knowledge and we provide an honest and, to the best of our knowledge, justifiable assessment of the occupancy figures. If the calculation of the gross rental yield already falls below the magic base, it is better to refrain from a purchase or to consider a higher investment in order to improve the key figures and to increase the net rental yield in the end. 

SUMMARY: The ROI is only conditionally meaningful, like the values on which it is based. It is a purely monetary value. If you leave out the location, the equipment and possible realistic occupancy figures when buying a property, a property can quickly become a losing proposition even in the sun of Egypt.

Therefore, trust between you and us is an important basis for a sustainable success and a profitable investment in Egypt!