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Crimea Real Estate
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In recent years foreigners' interest in Crimea's real estate has boomed. While many are buying up apartments in Yalta and other resorts for over $50,000 USD, many are looking for properties for $20,000 and less (yes, they exist!). The vast majority of foreign buyers buy real estate in Crimea in order to rent it out to vacationers with a pay-back period of around 5 years.

In Crimea, location is everything

When the real estate market began rising in Crimea in the 90s, investors were interested only in the principle resort areas ? Yalta and the South Shore of Crimea. This area enjoys a near-Mediterranean microclimate. Then, interest spread to smaller resorts further east and to Sevastopol on the west. Now, prices are rising further inland as well. No longer are only the first two kilometers next to the shore being considered for investment purposes. Foreign buyers are looking at properties 10 to 15 km inland to rent out to vacationers, who are starting to realize that there's not much difference between traveling 2 km to the beach and traveling 10 km, especially if the rent is lower and there are additional recreation opportunities available, such as hiking or horseback riding. Real estate in mountainous areas further inland (but within the 30 km zone) is rising more slowly in price, because it is difficult to get to the sea from there and the tourist infrastructure is not very developed.

The zone that real estate investors are interested in is a 30 km wide strip along the southern coast of Crimea. Here is where millions of Ukrainians, Russians, and foreigners vacation every year. The majority of these people spend their time on an even narrower strip of land about 2-5 km from the Black Sea coast. East of Feodosiya on Kerch Peninsula there is little interest for real estate, because the climate is worse (colder and windier) and the scenery is less appealing (no mountains, just steppe). Here there are very few vacationers. North of the Crimean Mountains there is also little interest in real estate; these areas are too far distant from the primary recreation opportunities to attract tourists.

So, to summarize, by far the most active area in real estate is the southern coast of Crimea from Sevastopol to Feodosiya and the zone 30 km inland (not counting Simferopol and environs, which are popular because it is the administrative center). Next come less popular resort towns on the west coast of Crimea (Yevpatoriya, Chernomorskoe, Saki), then Kerch peninsula in the southeast, and, finally, the steppe zone of Crimea, which has little potential for growth in prices.

Within the 30 km-wide band of desirable real estate, the highest prices are in the resort towns on the South Shore ? Yalta, Alushta, Sudak, Foros, etc. Next come properties by the sea shore anywhere along the coast. Next come areas within 10-15 km of the shore, and finally come villages and towns in the Crimean Mountains that are growing in price more slowly.

Finding a desirable property in Crimea

Not only are outsiders buying up land and property, but Crimeans themselves are speculating on land as well. Locals give more importance to ease of transportation and infrastructure development and are more interested in buying land for residential purposes. Outsiders give more importance to leisure potential ? the view, the "exclusivity" of the location, and leisure opportunities. The latter have been exerting a greater influence on prices and will likely continue to do so.

In selecting a property, pay close attention to the view out the window, the neighbors, and the neighborhood it is in. Most Crimean towns have neighborhoods with old farm houses where old people live and tend to their fruit trees, chickens, and garden plots. Avoid buying property in such areas, since they will be less attractive to rentors, and your neighbors may complain. Look for somewhat more upscale neighborhoods where there is some building and development going on, or central areas near main street and the local attractions.

Apartment or house?

Foreign investors are about equally interested in apartments and houses. Both are profitable to rent out to vacationers. Clients typically spend $5-15,000 on repairs and renovation before renting ? or an amount equal to 15-25% of the cost of their new property. Property management services make this process easy on buyers, who do not have to spend their time finding repair crews and monitoring progress. In addition, property managers will collect rent and care for your property after repairs are finished.

In buying residential property, be aware that 2500 sq. m. is the largest lot size that foreigners can purchase. Lots larger than this are no longer categorized as "residential" and thus are not subject to purchase by non-residents.

Real estate profitability

Let's look at some typical numbers. Let's imagine you buy a run-down two-room apartment (55 sq. m.) in Yalta for $60,000. After spending $10-15,000 on repairs to get the apartment in good shape, you might be able to collect $150 per day during the high season (June-August), and anywhere from $30-100 per day during the rest of the year. After maintenance expenses and property management fees, you would probably be able to recover your investment in 4-5 years.

Or, you could choose to buy an old house 15 km inland (say, in the vicinity of Orlinoe village) for $15,000, spend $6-7,000 on repairs, and collect $50 a day during the tourist season and significantly less the rest of the year. Such old houses usually come with lots of 1000-1500 sq. m. and are large enough to house about 6 people.

Making your Crimean property profitable

If you manage your real estate through property managers, your apartment or house in Crimea will be made available to real estate agencies that help tourists and vacationers find places to rent. In addition, you can promote your property yourself by creating a web-page with a detailed description and photographs of your property and nearby attractions and/or scenery. This can be especially important if you have a house inland that you are trying to arouse interest in.

If your new home or apartment does not yet have a telephone line, it is not too hard to get one installed through the local government phone office. If your property is in Yalta, Sevastopol, or another more developed, consider installing a dedicated Internet line. This will make your property more attractive to business travelers in the off-season. Dedicated lines are not yet available in most smaller towns.