Core and Core+ Investments In Real Estate

– Understanding Core investment opportunities

The primary characteristic of Core investments is their focus on generating as stable an income as possible. Core real estate is usually situated in high-demand locations, such as city centers, has long-term tenants and predictable income. Unlike other investment strategies that prioritize maximizing returns, Core investments emphasize capital preservation, a principle endorsed by each real estate agency in Yerevan Armenia.

Core investors receive on average 7% annual returns and use 40-50% leverage (borrowed funds). The property acquired with high leverage can no longer be considered as Core investment, as a small fluctuation in the value of the property can significantly impact returns.

– Key features of Core investment opportunities

1. Prime location: Core investment properties are typically situated in high-demand areas, such as city centers or other prime locations․

2. High quality property: These properties are characterized by modern designs, and are made of high-quality materials, making them stand out in the real estate market.

3. A steady stream of income: The rental income from Core investment properties is notably stable due to the persistent demand. Apartments for sale in Yerevan that fall under this category are often in high demand.

4. Long-term investment focus: Core investment opportunities are perfect for investors with long-term objectives. This strategy allows to withstand short-term market fluctuations, enabling flexible real estate transactions over time.

– Understanding Core Plus investment opportunities

With the evolution of the real estate market, new investment opportunities emerge. The investment property with a moderate risk and average return is known as Core Plus. These properties are typically located in areas near the city center or close to metro stations. Although demand for Core Plus properties is lower compared to Core investments, they offer the potential for higher yields through minor improvements, with expected annual returns of 8-12% and the use of 40-60% leverage. Core Plus investments combine the stable income characteristics of Core properties with the value-enhancing potential of Value Add investments.

– Key features of Core Plus investment opportunities

1. Combining stability and growth: Core Plus investments offer a blend of stability and growth potential. These opportunities provide a steady income stream while also allowing investors to capitalize on property value appreciation through strategic improvements.

2. Strategic property selection: Identifying a Core Plus property requires a comprehensive understanding of the market to uncover opportunities for enhancement and leverage potential for increased returns.

3. Active management: Such investments imply a more active property management. Investors are expected to implement value-adding strategies and optimize operational management to achieve desired outcomes.

4. Market dynamics: Investors must stay attuned to market trends, including supply and demand dynamics, to make informed decisions and effectively manage their Core Plus investments. Apartments for sale in Yerevan under this category may offer significant growth potential.

– Advantages and disadvantages

Risk

Core investments are generally considered less risky because they involve properties with high demand, even during significant market downturns.

Work

Core Plus properties require more effort in terms of selection and management. Investors need a deeper market understanding and more hands-on management compared to Core investments.

Profitability

Core Plus investments offer the potential for higher returns.

Stability

Core investments provide greater stability in terms of capital preservation and consistent income flow.

– Diversification

When investing in the real estate market,  it’s crucial to align your investment strategy with your personal preferences, risk tolerance, and willingness to invest time and resources. In addition to all this, diversification also plays a key role, ensuring that your portfolio includes a mix of investment types. This approach helps balance stability during market downturns with opportunities for high returns during market upswings.