RED-CO Apartments in New Gudauri vs Renting out Property in Tbilisi

By Kate Tabatadze

Why invest in RED-CO apartments? Owners of properties developed by RED-CO have the answer. People are constantly looking for profitable ways to invest their money. Investing in a RED-CO aparthotel allows owners to obtain an annual passive profit of up to 20%, whereas profits from deposits at commercial banks do not exceed 5-7%.

Another traditional method of investment is buying property in Tbilisi and renting it out, which is also less profitable than buying and renting out RED-CO apartments. For example, the average cost of real estate in the most prestigious areas of Tbilisi is $1000 per square metre, which means that a 40 m2 property (the minimum size required for rental) costs $40 000, on average. If it was to be rented out for $400 monthly, the owner would only recover his/her investment in 10 years.

What if the same amount was invested in a RED-CO apartment in New Gudauri? During the winter season, when demand is at its highest in the top international skiing resort of Gudauri, apartments are being rented out for an average of $100 daily, which amounts to $9000 in three months. The tourist season in New Gudauri continues even after the winter, with daily rental prices averaging $60. If the owner was to rent out the apartment during the busiest periods of tourist activity, the $9000 from the winter season (December, January and February) will be supplemented by $5400 from the less busy summer season (June, July, August). Therefore, the average annual income is $14 400. If we include utility payments and other fees (including fees payable to the RED-CO Management Group, which rents out the property), which amount to $7000 on average annually, simple calculations will show that owners will recoup a $40 000 investment within 5 years, whereas it would take twice longer if purchasing and renting out a flat in Tbilisi.

RED-CO creates and manages tourist infrastructure which brings profit both to the company and the owners of the hotel-type apartments and other private or commercial properties. New Gudauri is no longer just a skiing resort. The number of visitors to Gudauri is growing by 10-20% annually. As Red-co develops the local infrastructure, the flow of tourists is also increasing during the summer months, thereby also raising real estate prices at the resort.

The network of apartments with hotel services is one of Red-co’s flagship projects and constitutes a source of guaranteed income. In these matters, property owners are looked after by Red-co’s subsidiary company, the RED-CO Management Group, which offers apartment owners the luxury of being free from all worries regarding the process of renting out property. However, owners can also choose to rent out their apartments independently from RED-CO Management Group.

What does Red-co development in New Gudauri involve?

New Gudauri Residences & Spa is a network of aparthotels united under the management of RED-CO, offering hotel-type services: a booking system, a concierge, 24 hour security, secure parking, skiing equipment storage, room cleaning, as well as a private apartment rental service and a flexible booking system (on demand).  Numerous restaurants, bars and cafes, fitness centres and spas, children’s facilities and conference rooms are available to guests for an entertaining and comfortable stay at New Gudauri. In order to create European-standard interior and exterior, RED-CO has collaborated with highly qualified Georgian and foreign architects, a large group of designers, as well as representatives from world-renowned hotel brands and project companies for all of its projects. For all of the above, the company will be conducting investment totalling $150 million.