Shin Hee-seong, CEO of Remax Korea... Expectations of location and profitability alone are not enough.
These days, when the real estate market is going through a long-term recession, it is becoming increasingly difficult to find a sharp figure in the profitable real estate market. There are more factors to consider when choosing an investment destination. On the 16th, we met Shin Hee-seong, CEO of Remax Korea, and heard about things to keep in mind when investing.
Shin Hee-seong, CEO of Remax Korea, said the era of the real estate market trending upward is over. As the market where anyone can buy and make money has come to an end, it has become important to distinguish between the good and the bad of the product. He said that rather than deciding on a transaction simply based on location and current rate of return, one should look at future value.
Location and rate of return continue to be important factors when investing in housing and income-generating real estate. However, what has become more important recently is liquidity and future value.
CEO Shin said that real estate is different from finance, so there is a problem of liquidity. In the past, if you only looked for places with good rental income without any hesitation, now you need to comprehensively consider profitability, liquidity, and future value.
Although you purchase a product with a good location and high rate of return right now, there are times when it becomes a problem when you need funds or try to find another investment source to purchase the product. If you do not receive the right price for the product, the overall rate of return may eventually decrease or turn negative.
There were no such concerns during the booming market. It was common for a transaction to take place as soon as the product was put on sale, and the transaction amount was raised higher than the initial purchase price.
Therefore, in the past, when purchasing a property, there was a tendency to simply look at the location and rate of return (vacancy rate) and invest with the expectation that it would rise.
However, the situation is changing recently as yields have fallen. This is because even in investments in office and neighborhood buildings that maintained stable returns, the returns often decrease and difficulties in selling the properties often occur.
CEO Shin said that due to the economic downturn and the real estate market recession, the rate of return is getting lower and there are cases where the value of the building is falling accordingly, and that when these items are put up for sale, the actual transaction amount is bound to be lower.
As market conditions change, the success or failure of an investment often depends on the capabilities of agents who broker products. Therefore, new qualifications have recently become important for agents who arrange profitable real estate transactions.
The explanation is that in order to ensure the success of a customer's investment, the ability to quantify the location and rate of return of the product to reduce potential investment risks while also analyzing and predicting liquidity and future value is required.
Shin Hee-seong, CEO of Remax Korea, had a dream of creating a Korean real estate market with an advanced system. In July 2013, he signed a brand and technology introduction contract with RE/MAX, the world's top real estate company, and began pioneering the domestic real estate market.
CEO Shin expressed his ambition by saying that he will build a pioneering real estate company that opens a new paradigm based on the know-how, experience, and network accumulated around the world, and that he plans to achieve a market share of 30% by establishing an advanced and rational real estate business model in Korea.
'RE/MAX LLC', established in the United States in 1973, is the world's largest real estate franchise company with over 6,700 offices in 97 countries around the world. It is characterized by organic collaboration between over 100,000 agents when purchasing, selling, and leasing real estate domestically and internationally.
◆Shin Hee-seong, CEO of Remax Korea
△Graduated from Korea University, Department of Economics
△2009 Wide Partners CEO
△2013 Remax Korea CEO
Original link: http://www.thebell.co.kr/front/free/contents/news/article_view.asp?key=201407160100028820001787
