Advantages of Investment Property
The 2020s have largely been a period of growing economic uncertainty and financial market volatility. As a result, people are increasingly looking for stable investment opportunities that promise long-term growth. Such assets are short in number, but real estate has long topped the list. One of the most resilient and time-tested investment instruments, real estate not only preserves capital but generally offers steady growth.
In the blog below, we’ll explore why investment property is considered a reliable financial choice and its advantages compared to other investment instruments.
What is Investment Property?
Investment property is a real estate category that individuals or companies acquire specifically for prospective financial benefits, usually with no plans for long-term residence. The type, whether residential or commercial, doesn't matter as long as it has income-generating potential. Typically, income is generated short-term through renting out, while long-term prospects rely on capital growth.
Investment properties are commonly divided into several categories: residential apartments, commercial spaces, hotel-style accommodations, and mixed-use facilities. Each has type-specific risks and potential benefits. For instance, commercial spaces generally yield higher rent and are preferred among those seeking short-term profit but require a significant initial investment. Hotels have the potential to attract capital but require professional management and continued investment in human resources.
Having a long-term vision and strategic planning is essential. Prospective investors must analyze the existing market and evaluate the region, demographic trends, and economic prospects.
When making decisions, remember that successfully investing in real estate requires a long-term vision and a strategic plan regarding new property. It is simply mandatory to consider both global and local trends.
Key Benefits of Investment Property
One of the main advantages of owning investment property is its ability to provide dual financial benefits: regular income from rent and capital growth over time. According to the Knight Frank Global House Price Index, real estate is one of the most stable long-term investment instruments on a global level.
The Georgian market is small, making this trend easier to observe. E.g. according to TBC Capital’s October 2024 report, the annual price growth for residential real estate in Tbilisi reached 6%, while the market volume increased by 23% year-on-year. According to Galt & Taggart’s 2024 real estate overview, Vake and Mtatsminda have the highest price per square meter, with real estate rental the most profitable - an average cost of $14-15 per square meter.
With the recent developments in the loan market, buying an apartment for investment purposes has become even more attractive. In 2024, the National Bank of Georgia reduced the monetary policy rate to 8%. The reduced rate increased the accessibility of real estate investment in the eyes of the public, and demand swiftly grew.
Another reason why the secret is uniquely stable is a specific characteristic of real estate that many other investment instruments lack — it’s almost always protected from inflation. Knight Frank’s research shows that, on a global scale, real estate prices continuously tend to exceed inflation rates.
Advantages Batumi Real Estate Investment Property
Over the past decade, Batumi has become one of Georgia's most attractive investment destinations for several reasons.
Firstly, the continuous growth of its tourism potential. After Tbilisi, Batumi holds the second-largest share of the country’s economy, with tourism being the main economic driver. During their September event, Galt & Taggart noted that “further growth of tourist flow, infrastructure improvements, and the potential across various other sectors will help maintain high growth rates in the coming years.” This forecast is particularly important for a city where constructions of new residential complexes orient as much (and possibly even more) towards tourist demand as they do towards long-term residency.
The city is an attractive destination due to its geographical location and infrastructure. The international airport, coastal area, and modern urban planning support long-term resident influx. The potential for population growth naturally enhances the investment potential as well.
One of the most appealing investment factors is the range of choices — development is actively underway in Batumi, with more than 100 projects available on average at any given moment. And the higher the competition, the more favorable conditions for potential clients. For instance, apartments in Batumi with internal installment plans have become an expected option offered by most developers — reducing the need for bank mortgages. Moreover, real estate prices in Batumi are still significantly lower compared to other European seaside resorts.
Purchasing investment property in Batumi provides significant income diversification opportunities. During the tourist season, it offers short-term tourist rentals at high rates, while outside the season, properties can be rented to long-term residents. However, choosing an optimal location is key to such an effective strategy effectively. The location of OKTO ART HOUSE was specifically chosen to balance the interests of short-term tenants with those of long-term residents — the complex is near Batumi’s New Boulevard, 500 meters from the sea, but the territory itself is relatively calm, with comfortable and secure infrastructure.
