Investment and Finance

The Benefits of Investing in Collateral Property in Russia

4/27/2021 8:00:00 AM
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The real estate market offers one of the most secure and effective ways to invest money. As Russian real estate legislation is less complicated than either English or German Law, it is an attractive market for these types of investments, especially for foreign individuals.

Collateralized real estate is property that becomes the property of a creditor, for example, a bank, if the borrower violates the terms of the contract or fails to fulfill obligations under the loan agreement secured by the collateral. In other words, if the bank's client stops paying the mortgage and it is not possible to collect the required amount from him, his real estate may ultimately go to the credit institution. However, it is not profitable for the creditor to own such real estate, so he tries to sell it as soon as possible, sometimes even with discounts. 

Investing in collateralized property is a relatively new opportunity to increase profits. Such a deal can be very profitable or a complete failure. In order to succeed, you need to understand the details of the procedure. 

Briefly, the process looks like this: 

  • Representatives of the bank establish a security right for real estate. 
  • At a public auction, the right is put up for auction and investors compete for its acquisition. 
  •  After the sale, the problem of debt collection falls on the shoulders of the buyer. 

In order not to part with his property, the owner is obliged to pay off debts and interest payments. The money will go to the account of the buyer of the lien. If the owner of the property has not paid the required amount, then the one who invested money in this property becomes the new owner of the object. That is, by investing in a collateral object, you can get it for almost nothing. If the debt is nevertheless paid, then the investor receives up to 18% per annum. 

The investment strategy for the purchase of real estate is different from the strategy for obtaining interest payments. Here you need to correctly assess the quality of the acquired asset as well as have an idea of ​​the identity of the property´s owner. Thus, you can assess whether the person will pay off the debt or not. Investing for interest is a short-term strategy. Real estate investment, on the contrary, requires a more carefully prepared plan. 

Experts in Russia are well acquainted with all the intricacies of the strategy development process. They will hear the client´s wishes and select the most suitable option, having previously estimated the benefits. Thus, the risk of an unsuccessful transaction is reduced to zero because the providers have experience in the field of collateral real estate investment. 

Next, we describe some of the investment options available.

Investing in loans before selling real estate 

Rate: from 1.75% per month (21% per annum). 

Investment term: 3-6 months. 

Payment of percentage and loan amount at the end of the term. 


Investing in loans secured by real estate 

Rate - from 1.5% per month (18% per annum). 

The investment period is 6-12 months. 

Payment of percentage monthly, loan amount at the end of the term. 


Investing money through trust management 

1.5% per month (18% per annum) – monthly payment of percentage. 

1.75% per month (21% per annum) – quarterly payment of percentage. 

2% per month (24% per annum) – percentage payment at the end of the term. 


If you want to know all the advantages of investing in Russia, we invite you to visit our Russia country page. Luckily, here you'll find some of the best experts in wealth management, banking, and mutual funds in Russia.

Disclaimer: The information contained in this article is for informational purposes only and does not constitute financial advice or recommendations. Investing in financial products or cryptocurrencies involves risks, and you should be aware of the potential risks involved before investing. The content on this website is not intended to be a solicitation or offer to buy or sell any financial products or services. The information provided does not take into account your specific investment objectives, financial situation, or needs, and should not be relied upon as a substitute for professional financial advice. You should seek independent advice from a financial advisor or other professionals before making any investment decisions. Please be aware that the legal status of cryptocurrencies and other financial products may vary in different jurisdictions and may be subject to regulation. It is your responsibility to ensure compliance with any relevant laws and regulations governing the sale and marketing of financial products and services in your jurisdiction.

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