Perm vs Batumi: We compare ownership conditions and profitability of real estate investments in these cities

Published at 29/04/2020

Perm is one of the largest cities in the Urals, an industrial and scientific and cultural center with a population of over 1 million people. The city is economically developed – Perm ranks first in the region in terms of industrial production. There is a huge number of metallurgical, chemical, oil and gas processing, woodworking enterprises, as well as heavy machinery plants.
All this logically explains the presence of a large number of wealthy citizens and businessmen, who try to preserve and raise their capital with the help of one of the most reliable and profitable investment tools in the world – real estate. Experts of GEOLN.COM compared the liquidity and profitability of real estate investments in Perm and in Batumi, and analyzed where it is more profitable to invest money to gain maximum profit.
Perm vs Batumi: We compare ownership conditions and profitability of real estate investments in these cities — Advices from experts and reviews of real estate on GEOLN.COM. Photo 1

Common features

However, there are several strategic similarities between two cities as different as Perm and Batumi. Both of them have a very favorable geographical position and are located at the intersection of trade and transport routes from Europe to Asia.
Batumi is a port city located directly on the Black sea coast. Perm also has access to 5 seas at once – the Caspian sea, the Black sea, the White sea, the Azov sea and the Baltic sea, thanks to the largest navigable artery, the Kama river.
These factors form a high level of activity in both cities, respectively, real estate in them is in great and stable demand.

Perm vs Batumi: We compare ownership conditions and profitability of real estate investments in these cities — Advices from experts and reviews of real estate on GEOLN.COM. Photo 2

Fundamental differences

Batumi is a resort city above all, so real estate is considered here in terms of suitability for renting to tourists. Today, the city is one of the most popular tourist destinations in the world. According to the national statistical Bureau of Georgia, more than 2 million tourists visited Adjara, the capital of which is the city of Batumi, in 2019.
There are no large industrial enterprises in Batumi, and the favorable climate is formed by the proximity of the sea and mountains – here is the cleanest air and water that you can drink directly from the tap. In Perm, the environmental situation is very tense because of the developed industry, the presence of large enterprises and a huge amount of transport.
For the very reason more and more Perm residents come to rest in Batumi, often return here again and more often decide to buy their own real estate by the sea.
Perm vs Batumi: We compare ownership conditions and profitability of real estate investments in these cities — Advices from experts and reviews of real estate on GEOLN.COM. Photo 3

Analytics in numbers


According to one of the largest Russian media groups, RBC, published at the end of January 2020, Perm entered the TOP 15 cities in the Russian Federation for the efficiency of renting apartments.
The study was conducted on such key indicators as rental yield, average rental rate, and the payback period. According to the results, Perm took the 14th place in the rating consisting of 40 major regional markets in Russia. Analysts have calculated that with the average cost of an apartment in Perm of 2.85 million rubles (about $44,500) and an average annual rental rate of 237.5 thousand rubles (about $3,700), the apartment will pay in 12 years.
As for Batumi, according to the promises of most developers, the payback period of apar-hotels is 5-6 years. But analysts of GEOLN.COM believe that this forecast is overly optimistic. In fact, with the average cost of such type of property (about $30,000) and an average annual rental rate of about $2,700 ($220-230 monthly permanent lease), the payback is about 11-12 years.
But there is a significant detail – since Batumi is a resort city, in high season real estate can be rented daily at a much higher price, and in low season – monthly. In this case, the payback period of real estate can really be greatly reduced.

Perm vs Batumi: We compare ownership conditions and profitability of real estate investments in these cities — Advices from experts and reviews of real estate on GEOLN.COM. Photo 4

Comparison of the main parameters



Perm
Batumi
The average cost of 1 sq. m. in the "black frame"
from $620
from $450
The average cost of 1 sq. m. "turnkey"
$900-2000
$850-2000
The average cost of a monthly 1-room apartment rental
from $250
from $220
Average annual apartment yield
$3 700
$2 700
The payback period of the average apartment
about 12 years
 5-12 years

Conclusions


Based on these data, we can make a confident conclusion that investments in Batumi have a great potential. Georgian real estate is cheaper, and with a very small difference in the amount of rental rates, respectively, it pays faster.
In favor of Batumi is also the fact that tourist real estate can pay 2 times faster if you have a competent approach to managing your property. In the summer months, the apartment can be rented daily and receive an income 4-5 times higher than the cost of a monthly year-round lease.
It is very easy for foreigners to buy real estate in Georgia, and bureaucratic formalities are kept to a minimum, experts of GEOLN.COM highlighted this issue in the article https://geoln.com/invest-in-georgia/105. And here we have reviewed all the details of the process of buying a house in Georgia by foreign citizens https://geoln.com/en/articles/georgia/spec-project-house/92. It is worth noting another huge advantage when buying real estate in Batumi, namely the use of an innovative apartment management system G-plus.app, which allows owners to manage the budget, correspondence with the management company, payment for utilities, ordering additional services in one place.
Another bonus of investing in real estate in Georgia is the fact that foreigners get the opportunity to become residents of the country. Do you want to learn more about this? We will be happy to answer your questions and give you free advice on purchasing real estate.

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Diana Kabakci

The leading expert of the real estate market in Georgia
Education: MBA
Sphere: Real estate / Investments / Lawyer
Consultations made: 250
Expert on countries: Cyprus, Georgia, Kazakhstan, Poland
Known languages: Russian / Georgian / English / Turkish
Experience: 13 years
Expert publications: 545