Real Estate Agency on Buying Apartment in Georgia: Tbilisi or Batumi
Guide of Real Estate Agency on Buying Apartment in Georgia: Tbilisi or Batumi
Buying Apartment in Georgia is most popular demand we deal with in Ri.GE real estate agency. Real estate / apartments in Tbilisi and Batumi are obviously the most in-demand directions. This is caused by the fact that Tbilisi is official capital and economic center of Georgia, whereas Batumi is entertainment capital of Georgia, with sea, casinos and relaxed vibes.
Both cities have international airports. Therefore, in both cities we have enough demand on the real estate from locals, expats and tourists. Obviously, there are cities like Kutaisi, Rustavi, Poti and other, but they are in less demand between expats and tourists, nor there are as much locals as in Tbilisi.
Therefore, below we discuss real estate investment opportunities in two of these major Georgian cities: Tbilisi and Batumi. Namely, we discuss investment in Georgian apartments in Tbilisi and apartments in Batumi.
Why apartment in Georgia and not house?
Simple fact is that when the intention of the person is to invest funds wisely, we shall aim at the highest return on investment. Highest return on investment can be achieved through investments in smaller real estates and the smaller it is – normally higher is the ROI, as bigger the investment – higher the risks related to it and the funds needed to fix and maintain the real estate. On the other hand, smaller the investment – less will be the digits in absolute terms, though percentage of ROI might be less than in case of bigger investment. Therefore, finding sweet spot lays somewhere in between.
Houses are normally much bigger than apartments in multifamily houses. Plus, they need constant maintenance related to its outdoor and indoor infrastructure. Utilities are normally also higher, as the residential area is bigger and energy efficiency normally lower. Thus, people who plan to live in Tbilisi / Batumi are more looking for apartments, rather than house. As real estate investor shall look at the real estate with higher demand – obviously apartment option shall work more efficiently, as it will be much easier to find tenants.
There is also certain type of apartments called aparthotels. Aparthotels are hotel-type apartments, which often are presented in the building with internationally recognized franchise. Such apartments have become popular in Batumi.
Buying real estate in Tbilisi
Tbilisi is the capital of Georgia. Construction is one of the major directions of Georgian economy. Nowadays, construction in Tbilisi is booming, and that is the reason why you would want to invest in Georgia. There are many developers constructing high multifamily houses in the city. When investing in apartment in Tbilisi there are two main things you must consider: year of construction of the house, area of Tbilisi.
Year of construction of apartment in Tbilisi
Apartment in Tbilisi can be in a new development / under development or old building. Old buildings are also two types: soviet era apartments or 19th century apartments. In this article we discuss apartments under development, under development and old buildings of 19th century.
Apartment in Tbilisi under development
New development means that you have a possibility to buy apartments in Tbilisi or any other city for a big discount (earlier you buy – higher yield). Additionally, having apartment that was not used before might be pleasant experience for a person who lives there first. Finally, you have a chance to plan renovation from scratches, based on the preferences of the owner. All of this sound very attractive.
However, apartment in Tbilisi under development is normally bearing highest obvious risks:
- fraud (when the developer is not finishing the development);
- inadequate quality of development (not finishing parking area / poor quality of materials used, safety issues);
- postponing of finalization of development for too long time (sometime developers are 3-5 years late).
Apartments in such condition in Tbilisi require highest level of trust to the developer and is mostly suitable for people who can bear high risks for intention to get higher income.
Newly developed apartment in Tbilisi
Newly developed apartment is perfect option, based on the fact that the most modern materials are used, it is already developed and you can make proper assessment of what you buy exactly. Plus to that, newly developed apartment has a resource to serve you well for tens of years (if developed well). Normally, such apartments have highest level of comfort (or at least you exactly know the level of comfort it can provide, if checked properly!).
And last but not least – it most likely will have a lift to get to whichever floor you live.
Newly developed apartment’s con is mostly related to its price, as risks related to apartment are lower than in case of the apartment under development.
Newly developed apartment in Tbilisi is best option for personal purposes (not for investing), but at the same time it is good for investment in prestigious areas of Tbilisi for rentals on foreigners and high-income earners.
Old developed apartment in Tbilisi
Old developed apartments are normally built in 19th century and have historical or cultural heritage status. They are constructed in Old Tbilisi: Chugureti, Ortachala, Mtatsminda, Sololaki, Vera, Avlabari.
Best part of it is that they are located in the most central locations, and such apartments often have additional immaterial value, as they are often unique with historical flavor. Such apartments are highly preferred by the tourists to “feel” real Georgian heritage.
On the other side – the resource of such houses is close to zero and many of the buildings are in emergency and need additional structures for fortification. Additionally, the neighbors must be considered (in some cases there are problems with common space, etc.). And last but not least, if the building has special status – there will be certain restriction related to it. In particular, it might need a permission to make changes inside or outside. If the previous owner has made any changes where s/he was not allowed – you might be in big trouble as there are very high fines and even worse, there is a chance that the building might collapse because of certain changes.
Buying apartment in Batumi
When buying apartment in Batumi, exactly same issues must be considered as in case of Tbilisi. However, Batumi as additional type of buildings – skyscrapers. Plus to that, in Batumi you additionally look at the distance of the apartment towards the sea – closer to the sea – more prestigious it is.
Biggest developers of skyscrapers in Batumi are Orbi and Alliance Group. Both are giants in the sphere. Apartments built by them are normally in the first line or almost in the sea!
Difference between apartment in Tbilisi and Batumi
Difference of income generated from real estate in Tbilisi and Batumi is that income from real estate located in Batumi is mostly seasonal (though during time the tendency is changing and Batumi is becoming all-year-round livable). Income from short-term rentals is significantly higher than in case of long-term rental in both cities. Short-term rental in summer is normally much higher in Batumi, than in Tbilisi. Prices on property in both cities rise dramatically last few years. But it is still cost-effective to rent apartment in Tbilisi for foreigners.
You either buy from the developer or from the secondary market, however there exist significant legal risks related to purchase of apartment both from the developer as from the secondary seller. Everyone tries to sell, but not everyone discloses all the things related to apartment related obligation, mortgage, seizure, status, condition, reputation, neighborhood and many other.
As there are many variables, we suggest buying apartment in Tbilisi / Batumi only through a professional real estate broker, who can provide full due diligence of property (as separate service) in order to minimize all the risks mentioned in the article above.
The content of this webpage is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial circumstances. Investment involves risk.
