Expert estimates investments in foreign real estate and opening a deposit in 2024

This year was marked by significant changes in global financial markets, which made investors reconsider their strategies. Investor Alexander Voronkov told Izvestia on December 12 which of the two methods turned out to be the most profitable: opening a ruble deposit or investing in foreign real estate.

According to him, a bank deposit is suitable for investors who value stability and are ready to give up potentially high profits for the sake of reliability. Deposits provide guaranteed income, convenient management and insurance of deposits up to 1.4 million rubles in case of bankruptcy of the bank. This is relevant given the increase in interest rates from 14-15% to 20-23% per annum by the end of the year.

"High deposit rates could not compensate for the weakening of the ruble against other currencies, including the dollar, whose rate rose from 83-90 to 105-110 rubles. As a result, the real yield in currency decreased. In addition, income on deposits is subject to a 13% tax, which further reduces net profit. For large deposits, the tax burden becomes especially noticeable," said the expert.

He cited an example: if a depositor placed Br10 million in January 2024 at 15% per annum, his income by the end of the year will amount to Br1.5 million. However, if the same Br10 million is placed in November at 23%, the annual income will reach about Br2.3 million before tax deduction when recalculated to the annual yield. At the same time, the income of Br1.5 million at the beginning of the year at a rate of Br85 per $1 corresponds to $17.650, but at a rate of Br110 per $1 this amount is reduced to $13.640, said Voronkov.

At the same time, he emphasized that when planning investments and choosing financial instruments, it's important to take into account inflationary processes. In his opinion, even a high interest rate does not provide full protection of savings from depreciation.

In this sense, investments in foreign real estate in 2024 remained attractive due to a stable income in dollars or euros and protection from the weakening of the ruble.

"By purchasing real estate, an investor, firstly, receives a stable income throughout the period of ownership of the object. Secondly, over time, real estate usually increases in value, and even taking into account inflation, the profit will be significant. And if we take into account the possible subsequent sale of the object, the benefit will become even more tangible, "- said Voronkov.

At the same time, predicting the profitability of owning foreign real estate, it is necessary to take into account the tax obligations of each country.

In Indonesia, for example, in Bali, the yield averages 15% per annum in dollars. Depending on the season, it can reach 25-30%, especially in the peak months of tourist demand. At the same time, taxes amount to 10-20% of the profit, depending on the method of management, the investor noted. For example, a villa worth $200 thousand - about 17 million rubles at the beginning of the year and 20 million rubles by the end - brings an income of $30 thousand a year. During the summer and New Year months, the income can grow significantly, increasing the annual profit to 25-30%. Net profit after taxes is $24-27 thousand, said Voronkov.

In addition, he said that in the United Arab Emirates (UAE) there are no taxes, but the yield is lower - about 7-8% per annum in dollars. In Vietnam, the yield ranges from 10-12% per annum in dollars, with 15% of the profit going to taxes. In Europe, for example, in Spain and Germany, the yield is more modest - 3-5% per annum in euros, and taxes amount to 20-25% of income.

Ruble deposits provided an opportunity for quick earnings due to high interest rates, but according to the results of the year at best deposits compensated for the decline in the ruble exchange rate against other currencies, the expert said.

"Foreign real estate, especially in countries with high yields, such as Indonesia, turned out to be more profitable for long-term investors. It guaranteed a stable income in hard currency and protection from exchange rate fluctuations, which made it a preferred instrument for preserving and multiplying capital in 2024," Voronkov summarized.

Earlier, December 4, it was reported that more than half of the surveyed (79%) of Russians save on deposits to buy real estate. This is stated in the results of the study of the company Regions Development. The purchase of cars interested 38% of respondents. 29% of survey participants plan to allocate funds for housing repair.