Tim Louzonis, originally from the city of Worcester in the American state of Massachusetts, only co-founded his real estate agency in Kyiv three years ago. But his experience in Ukraine stretches much further back than that: he first arrived in the Black Sea port city of Odesa in 1993 as an exchange student, and has since then worked all over the country.
Over the years he’s learned plenty about the do’s and dont’s when it comes to making property investments in Ukraine. He says for many outsiders from other countries who are used to transparency and the easy availability of market data, the first thing to understand is that things here aren’t quite so straightforward.
“Ukraine is a place where you have to do all your homework,” he told the Kyiv Post in an interview. “It’s not a place for those who want to do it themselves. If you think you can do it all online, you’re in trouble.”
Money to be made
For Louzonis, there is no question that there is money to be made in Ukrainian real estate. His agency focuses on Kyiv, where he says the simple logic of a lack of supply of good apartments in the city center means for the investor who is willing to put in the due diligence, the deals are out there.
Not only are the values of centrally located properties likely to rise in the coming years, if you target them correctly they are rentable at rates which can comfortably yield 10 percent annual return on investment, he says.
Such predictions come as Ukraine is experiencing relative economic stability and moderate growth following the steep downturn in the wake of the EuroMaidan revolution of 2014–2015. This means ex-pats from foreign governments and big corporations are starting to trickle back in, which for property investors is very good news.
“Eighty percent of expats live in the central districts of Kyiv, and for investors that is the best market to focus on,” said Louzonis. “There is a shortage of expat-suitable housing. It’s already tough to find what they want, and it’s only getting harder.”
Market realities
In spite of the potential profits to be made, Louzonis stressed that “every deal is different” and there are no shortcuts. As in most other aspects of life in Ukraine, the gray economy plays a major role and brings its own specific set of risks and challenges.
“People carry around suitcases of money, that’s the reality of the market,” he said.
But he is optimistic that things are slowly changing, and says his agency is one of the few in Kyiv which actually has the know-how and contacts to structure deals through all the proper legal channels.
That’s something that could attract more foreign investors who want to work according to the kind of rules of the game they recognize from home. But for now, it remains a minority pursuit.
“It is possible and it will become easier,” Louzonis said. “But for the savvy investor who’s willing to put in the work to do it legally, there are opportunities that others won’t see.”
