It is worth investing in real estate, but you have to take into account the risks and observe the changes in the market. When taking out a long-term loan, it is important to remember that its repayment will not be the same burden for us over the years. In a situation when there are problems with financial liquidity and the property becomes a threatened asset, managing it requires knowledge and experience. On the Polish market, a service is currently developing, thanks to which a difficult real estate can be brought to a straightforward conclusion, for the benefit of both the owner and the bank.
Credit risk, excessive leverage and loss of financial liquidity are the basic factors that can lead even an attractive property to the status of threatened. In Poland, the most common practice is to hand over such an object or premises to a bailiff (real estate) or a trustee (a company owning the real estate). As Maja Biesiekierska, Head of Advisory and Asset Managements, Prelios Real Estate Advisory Sp. z.o.o., a company dealing, among others, with the management of endangered assets, says, there are possibilities to save such property through restructuring activities.
- Buying real estate is associated with risks over which we have limited influence, and what is worse, we usually cannot predict them. That is why a special service was created, tailored to the needs of the 21st century, asset management of difficult properties. In the West, specialists in this field are often employed by banks themselves. It was within the framework of such an assignment that I dealt with non-performing loan portfolios for Lehman Brothers. The experience I gained and the knowledge I need allow me to offer such a service to clients on the Polish market - adds Maja Biesiekierska.
Risk to real estate
A non-performing asset is a property securing a loan which has drastically lost value as a result of actual or potential losses caused by increased credit risk, loss of financial liquidity and changes in the market situation. A well-known and highly publicised case is the repayment of loans that were taken in Swiss francs. The increase in currency value had a drastic impact on the portfolios of people earning in PLN.
On the other hand, the threat that entrepreneurs who invest their funds in new investments have to face is the difficulty in getting out of their commitments. This may result in a forced sale of an asset - usually much below market value. A similar loss has to be taken into account by private individuals, who have been forced by market changes to sell the property at an unfavourable price.
Management of real estate at risk
The fate of a property that is unprofitable is not a foregone conclusion. It is only necessary to seek the help of specialists who, after learning about the history of the property and the source of the problem, will lead to the restructuring or repositioning of the property.
- Property management is not only dry data, it is primarily a way of thinking and looking at it from a wider perspective. For example, a building on the outskirts of the city is not necessarily a good place for a bank, but an ideal place for a cheap hotel, for people visiting the capital city for tourist purposes, explains Maja Biesiekierska. She adds: Experience shows that there are a number of treatments that can be performed, which, for example, will increase the rate of return for investors, and thus will take the property out of trouble. I am glad that we can offer this unique service to Polish clients, because for many it is a great support in their business.Source: newsrm.tv