Rating agency "ElitExpert" met with the co-founder of "Kovcheg" corporation, Serhii Zaruba, to discuss the current state of the real estate market in Ukraine and how the war has affected the industry. They talked about challenges and opportunities for investors in today's conditions, ways of working with clients, as well as about conducting the future of the real estate market after the war.
— I respect people who continue to do business in Ukraine during the war, contributing to the development of our economy. Tell us how today's situation affected the work of the "Ark" corporation? What are the main directions of your activity in these conditions
— Our company has been in existence for 16 years, we actively work both in Odessa and in suburban areas, for example, in Avangard with residential complex "Artvil", residential complex "7nebo".
10 people work in "Kovchez", and even during the war, we did not stop our activities for a single day.
The corporation has several directions: direct sales and rentals through our real estate agency; investment, as we ourselves are investors and not only in real estate; a closed club for investors, access to which is possible only by subscription; franchise sale. Conducting Transformational Games by Olga Sheremetska, a certified psychologist, hypnotherapist, Gestalt therapist, system arranger, regressologist and coach. Also, Olga Anatolyivna gives online and offline consultations to our clients and partners - contact us.
In the first days of the war, on the basis of the corporation, we organized the "Kovcheg" volunteer center, helped needy displaced persons from "hot spots". We still continue this volunteer activity.
— How do you interact with customers, what guarantees do you offer them?
We guarantee full support of the agreement — from the first meeting to the moment of handing over the keys. This includes checking the legal purity of the object, the presence of debts, loans and other encumbrances. We also control the correctness of documents and currency transactions within the framework of agreements.
From experience, the buyer often does not know what he wants, so we always select several options to find what is perfect for the customer, even if it is about such small things as the color of the wallpaper.
At the same time, we always tell our clients the truth, and I believe that this approach is our main value.
— In your opinion, the number of fraudsters who want to profit from the current situation has increased in the country?
— There were fraudsters before and, unfortunately, there are now. Even new schemes have appeared, when, for example, notaries make fake power of attorneys for real estate in the occupied territory and sell it here, while the real owners are abroad. They even enter this information in the registers, so it is always necessary to look at where, by whom and when the power of attorney was issued.
— And tell us about your franchise, what it is and how it works?
— We have our own system of work in real estate, which we use successfully: we enter all our clients into a special CRM database, which our managers then work with.
Over time, any of our employees can grow to a director, and later to a partner. If he became a branch director and wants to continue to develop, we provide him with all our tools and training. He applies them, working independently, but within the framework of our system.
We sell such a franchise with a full set of tools, so everyone who wants to make money from real estate today - contact us.
— How profitable is it to invest in real estate in Ukraine now, and what is the priority?
Big money is always a risk, especially today.
Currently, one of our active areas is related to the sale of real estate for those who are planning to move abroad, or who are currently abroad and want to sell their apartment in Ukraine.
For such customers, time is a critical factor and they need to do everything very quickly.
We also invest in new buildings, but only in those that are approaching completion. We buy, repair and resell. It is very convenient to conduct these transactions within the Investors Club, as not everyone has the full amount for a large purchase. And so, 3-4 people got together, invested money, bought a new apartment, repaired it and sold it, and shared the profit. The time-money formula works here.
We keep internal statistics of completed transactions, constant analysis of the cost of square meters in each district. So that, investing 25-30 thousand dollars, our investors could earn 3-4 thousand dollars in one and a half to two months. This is a very good income, if calculated as a percentage.
— What is the minimum amount a person must have to become a member of your Investors Club?
— Even an amount of 5-10 thousand dollars already allows you to start working with us. We ourselves select directions for investments, evaluate potential profitability. We have everything: analytics on amounts, income, terms. If the apartment needs repairs, we have proven specialists who are ready to do it.
— Do you work with state lending programs, for example, with the "eOselya" program?
— Yes, we have experience working with such programs. Recently, a military serviceman contacted us - they really are given favorable interest rates on loans. We help our clients with the submission of all necessary documents to the bank, accompany the transaction from the beginning to the very end - until the moment of receiving the keys to the apartment. And the owners who sold receive money in cash, a predetermined amount.
In general, everyone can contact us for credit programs. Having bought such a property, you can immediately live in it or rent it out.
— Are there more people wanting to buy or sell real estate today?
Sell. Especially recently, which naturally affects prices. We compared rental and sale prices per square meter in Odesa and Lviv. We have, in my opinion, real estate that is very undervalued right now and, in the long term, it is a huge opportunity for growth.
Everyone who understands this is now actively buying real estate in Odessa. In the future, we will become part of the European market, and this is a completely different story, for which you can prepare now.
— By the way, why do people continue to sell apartments, is this a panic?
- No, everything calmed down a little, compared to the beginning of the full-scale invasion. And then they really sold everything in a panic and ran away.
Now the real estate market has stabilized.
— And the prices too? In particular, for the premium and middle segment...
— At the beginning of the war, prices fell sharply: if a one-room apartment cost about 2022-30 thousand dollars by 32, then in the first six months of the war the price dropped to 17-18 thousand. Today, prices have recovered to around 26.
Economy-class apartments under state lending programs, which people buy for themselves, are currently selling best. Today, even construction companies already work under these lending programs, go to meet buyers, sometimes even sacrificing some profit.
— What about the reliability of construction companies? Who should pay attention to?
We cooperate only with proven construction companies. But there are also those with whom we do not recommend cooperation to our investors due to their history of failed projects and unfulfilled promises.
One of these companies, for example, in the village of Kotovskyi, the second — at the 16th station of Veliky Fontan.
Many companies initially promised something they could not deliver. Some of them stopped construction due to the outflow of funding, when people moved abroad and stopped paying installments.
In general, in Odesa, only 30-40% of companies were able to maintain their activities and continue construction, because they have their own financial safety cushion and do not depend on the payment of investors, while others have suspended work.
— Have people's preferences changed in connection with the war and anxiety? Do your customers still want to live in high-rise buildings with a beautiful view of the sea or are they now focused on low-rise buildings with bomb shelters?
- Likes are divided. Approximately 20% of buyers have not changed their habits and continue to choose housing with panoramic glazing and a view of the sea, they say: "it will fly, it will fly." Others want to have shelter.
In the case of single-family homes, about half of buyers are now looking for a home with a shelter. Just recently, one of these houses was shown, it has a bomb shelter with an area of 10 by 10 meters with all the necessary minimum amenities.
— I know that your corporation also works with the international market, with which countries?
— Yes, we actively work not only in Ukraine, but also abroad — in Turkey, the Emirates, Romania, Bulgaria.
Our compatriots who left and settled abroad are also our partners. They start companies and continue to work with us.
There is also a direction of the hotel business, for example, in Bukovel, where investors receive income from renting out their square meters through a management company. At the same time, the entrance threshold is low, you can even buy a 10 square meter room with several investors.
— What should people who invested in new buildings do, but the construction is frozen and the money is not returned, referring to military actions?
First, it is necessary to carefully study the contract that was concluded with the developer. It is important to understand what conditions were prescribed, how the company reacts to the current situation. We have had cases when we managed to agree on the return of part of the funds from construction companies.
— And what are the chances that the frozen projects will be completed or resold to other investors?
Quite high. There are investors who are ready to take risks and repurchase unfinished objects. This is especially relevant if we take into account that the real estate market in Odesa will grow significantly after the war. In my opinion, those who take risks now will reap very good returns in the future.
Olena Ovchinnikova communicated
