Main Risks
Cautionary Notice and Risk Alert
1. Investment Risk Notice
Please be advised that the simulations provided on our site are simply indicative projections and do not carry any contractual value. These tools are meant to support decision-making but do not replace a comprehensive analysis of your personal financial situation or the technical and legal constraints of the property in question.
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Investments in international properties carry inherent risks. It's crucial to understand that your capital may be at risk, and you may not achieve the expected returns. Engaging in investments with LifeInvest® using credit or borrowed funds carries an elevated level of risk. Even in cases where your investment reduces in value or is not fully repaid, your obligation to meet repayment commitments remains.
2. Variable Income Notice
Suggested potential returns and asset appreciation are projections based on the most optimistic investment scenarios. They should be considered in the light of your actual investment conditions and prevailing market conditions, particularly in terms of rental and banking situations. LifeInvest® does not guarantee a rate of return, and it is important to understand that external factors can have a significant impact on your investment. These factors include local markets, economic conditions, adverse national or local regulatory changes, among others.
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Investing in real estate is speculative. Although LifeInvest® provides projections of gross rental income from third-party sources, these estimates are not guaranteed. Rental income may be lower than forecast, or non-existent for certain periods. Any shortfall on the part of tenants may reduce expected returns. In addition, properties may occasionally be unoccupied.
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The value of your investment may fluctuate, and past performance is no guarantee of future results. Returns, whether rental or capital, depend on many factors, including economic conditions and asset specificities. A decline in the value of your investment can come from a variety of sources, such as a fall in the property's base value, or problems with the property that require financing from future rental income.​​
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Real estate investments can exhibit cyclical behavior, with the value of real estate assets likely to rise or fall accordingly. Like other asset classes, the value of real estate can be influenced by economic, political and legal issues. A future downturn in the real estate market can have a significant negative effect on the value of your property, potentially resulting in a partial or total loss of the income generated by a real estate investment. It is therefore of the utmost importance for investors to personally assess and establish their tolerance to these risks at the outset of their investment journey.
3. Liquidity Risks
Given that real estate falls under the category of 'illiquid assets', which refers to assets that may not always be easily liquidated, you could face difficulties when trying to sell the property. At any given point, you will have the opportunity to place your investment up for sale on the market. However, you may encounter scenarios where potential buyers are not willing to purchase your investment at a price you consider fair, or perhaps show no interest in purchasing it at all. Such transactions could potentially span several months
4. Forecasts and past performance
Our yield projections are based on steady income growth over a ten-year period, taking into account an annual price appreciation of 3%. To put this into perspective, the past has shown us an annual increase of 15% in Estonia and 10.1% in Latvia for prices per m² between 2010 and 2023, according to official Eurostat data.
We have factored into our earnings calculations an annual rental growth rate of 2.25%. However, it is important to note that, historically, rents have risen more sharply in Estonia (+212%, or around 16.3% per annum) and more modestly in Latvia (40%, or 3% per annum) over the same 13-year period.
It is essential to understand that these data are based on past performance and are not a guarantee of future returns. Markets can vary according to many factors, including economic conditions and government policies.
5. Preparation for Rent
The amount indicated for the renovations is an estimate. This amount only becomes definitive once the estimate has been sent, normally prior to the signing of the final deed of sale.
Warning
LifeInvest® and its employees are not financial investment advisors or licensed tax attorneys. All information provided by LifeInvest® is intended to help you make your own informed decisions. Before making any investment, you should exercise due diligence. In case of doubt or uncertainty, we recommend that you seek the advice of an independent financial advisor.