Unit III: buying a home

As you come in through the front door, you find yourself in а large hall with an open fireplace, which is unusual. One of the doors on the right of the hall leads into the living room. This room faces south, so it’s very sunny, and it has a lovely view of the whole valley.

The furniture has been chosen to match the style of the house, so there’s a lot of leather and dark, heavy wood. Next to this room there’s the dining room which has French windows leading onto а small patio.

Also on the ground floor there is а study, kitchen and utility room. A wide staircase takes you to the first floor, where there are five bedrooms. The largest is about 25 х 20, a really vast room which looks out onto the garden.

The house is in 2.5 acres of land, and there is a green house, а shed, a swimming-pool and a tennis court.

It’s a beautiful place to be at any time of year. In winter it’s warm and cosy and in summer there’s so much to do outside.

1) The description is in five paragraphs. What is the purpose of each one?

2) Go through the text again and underline like this _______ what is factual description and like this _ _ _ _ _ _what is personal opinion. Sometimes the same sentence may be part fact and part opinion.

3) Box like this □ all the prepositions (and prepositional phrases) of place.

4) How many different rooms are mentioned?

a. What do you do in each room?

b. Are there any rooms not mentioned?

5) Circle like this ○ any words or expressions that you think are special to the description of a house.

6) Now write a description of а house or a flat. Include the following:

- facts and physical description;

- your impressions and opinions;

- a description of some of the rooms.

Text a: buying real estate abroad

either …or – или…или

to retire – выходить на пенсию

to involve – включать

reliable – надежный

asset – имущество; средства; капитал

to diversify – разнообразить

investment portfolio – портфель ценных бумаг

acquisition – приобретение

despite – несмотря на

fairly – достаточно, довольно

rating – отнесение к классу, разряду или категории; оценка

appeal – привлекательность, притягательность

inherent – неотъемлемый, присущий

assessment – оценка

array of – ряд чего-л

indirectly – косвенно

significant – значительный, существенный

impact – влияние, воздействие

to compare – сравнивать

to be superior to – превосходить; быть выше (чего-л)

on par with – наравне с…; на одном уровне с…

to be inferior to – уступать кому-л (в чем-л)

comprehensive – всесторонний; исчерпывающий; обстоятельный

return – прибыль

evaluation – оценка

with regard to – относительно; в отношении; что касается

particular – определенный

additional – дополнительный, добавочный

original – первоначальный

to incur – потерпеть убытки

managerial – управленческий

to rate – классифицировать, устанавливать категорию

median – срединный

moderate – средний; небольшой

unacceptably – неприемлемо

aggregate – общий; совокупный

value – значение, величина

scale – шкала; уровень

invaluable – неоценимый; бесценный

established – признанный, авторитетный; известный

track record – достижения ( в какой-л области); стаж (работы)

mortgage – ипотека

to secure – гарантировать; предоставлять

secondary market – второстепенный (маленький) рынок; вторичный

profitable – выгодный, рентабельный

to view – осматривать, смотреть

to handle – обрабатывать (документы)

lawyer – юрист

developer – проектировщик; застройщик

reliability – надежность

to augment - увеличивать; прибавлять

Buying real estate abroad is becoming increasingly popular. The buyers and investors can be divided into two categories.

The first category is made up of individuals who want to live abroad, either now or in the future; they may hope to buy an apartment for their children who will study there, or for themselves after they retire. Or they may desire to do business abroad.

The second category involves those who simply want to invest their money in real estate, a reliable asset, thus diversifying their personal investment portfolio. Whatever the case, the acquisition of real estate is a good investment.

Despite state borders, the acquisition procedure for real estate abroad is fair­ly simple. A prospective buyer should formulate his or her goals for any future acquisition, as well as study the specifics of real estate markets, includ­ing prices. To ensure a better under­standing of foreign markets and their investment opportunities, Miel Holding has developed a system of investment ratings, called Miel DPMR.

A country’s “investment appeal” is comprised of two main indicators: the potential of the real estate market and the inherent risks. Assessment of a market’s investment potential is based on an array of macroeconomic indica­tors – the so-called “country specific factors.” These are subdivided into 10 main groups, including labor, con­sumer market capacity, production, financials, institutions, natural resources and tourism. There are also two subgroups, which are made up of real estate, including basic real estate market factors, and specifics, which are only indirectly related to the real estate market, but can have a significant impact on it. Together, these factors give a reliable assessment of a country’s real estate investment potential.

In the Miel DPMR system, Russia’s real estate investment potential is com­pared with that of ‘Country A’ and the following assessments are made:

A: Country A’s investment potential is superior to Russia’s;

B: Country A’s investment potential is on par with Russia’s;

C: Country A’s investment potential is inferior to Russia’s.

It is important to note that assess­ment of the real estate investment potential is a more comprehensive indicator than return on investment: it offers a comparative evaluation and characterizes a real estate market as part of a country’s macroeconomic system. As for return on investment, that is calculated by Miel DPM experts with regard to a particular property.

The other indicator of a country’s real estate market and its investment appeal is investment risk. This is deter­mined by an assessment of probable additional costs (losses) as a percent­age of the sum of original investment that can be incurred by a person in a particular country. The main risks are political, social, environmental, man­agerial, criminal, and financial. Each category is rated according to four risk levels:

Risk Level I. Low (median losses are under 10 percent of the amount of investment).

Risk Level II. Moderate (median losses between 10 percent and 20 per­cent of the amount of investment).

Risk Level III. High (median losses between 20 percent and 30 percent of the amount of investment).

Risk Level IV. Unacceptably High, (median losses exceed 30 percent of the amount of investment).

In the aggregate investment rating, the first value characterizes the poten­tial and the second characterizes the risk. For example, the АIII rating indi­cates that on the investment potential scale, a country/region has been given the A rating, while on the risk scale it falls into Category III – i.e., a rather low investment potential and rather high risks.

These invaluable investment rat­ings provide a general idea about the investment value of a country’s real estate market. After this, a prospec­tive buyer (investor) should consult with a company that has an estab­lished track record in distant proper­ty management.

There is a wide range of investment options – buying one property, or sev­eral properties in different segments, or in different countries, etc. Properties can be chosen within a specific invest­ment range, or a mortgage can be secured to buy property. An acquisi­tion can be made on the secondary market or while construction is in progress, which is more profitable in certain countries. A prospective buyer is strongly advised to visit the country of choice and view the available prop­erties. A deal can be finalized and the payment made in Russia. As far as doc­uments are concerned, only an inter­national passport is needed.

In processing the final contract, spe­cial attention should be paid to the paperwork. This should be handled by lawyers, who will determine if the acquisition is made on the secondary market and will assess the developer’s reliability if it is on the primary mar­ket. All of this is guaranteed by market professionals.

Amidst the ongoing financial crisis, real estate abroad has a special impor­tance today, since it provides an instru­ment that not only protects, but also augments a buyer’s (investor’s) per­sonal assets.

Ex.1 Give Russian equivalents:

to become increasingly popular; to live abroad either now or in the future; after they retire; whatever the case; to formulate one’s goals for any future acquisition; including prices; a system of investment ratings; the so-called “country specific factors”; basic real estate market factors; to be indirectly related with smth; real estate investment potential; an assessment of probable additional costs or losses; according to four risk levels; the amount of investment; to provide a general idea about; a wide range of investment options; to make an acquisition on the secondary market; the available properties; as far as documents are concerned; the ongoing financial crisis.

Ex.2 Give English equivalents:

разделить на; заниматься предпринимательской деятельностью; за границей; вложить деньги в недвижимость; надежный капитал; государственные границы; потенциальный покупатель; чтобы лучше понять инвестиционные возможности иностранных рынков недвижимости; емкость потребительского рынка; прибыль на инвестированный капитал; процент от суммы первоначальных капиталовложений; по уровню инвестиционного потенциала; управление имуществом на расстоянии; в пределах определенной денежной суммы; пока идет строительство; обращать особое внимание.

Ex.3 Answer the following questions:

1. How many categories can buyers of real estate abroad be divided into?

2. How do reasons for investing in real estate abroad vary within these categories?

3. What can you say about the acquisition procedure for real estate abroad?

What should a prospective buyer do?

4. Why has Miel Holding developed a system of investment ratings?

5. What is an assessment of a market’s investment potential based on?

6. How does Miel Holding characterize Russia’s real estate investment potential?

7. What is the investment risk determined by?

8. What are risk levels?

9. What investment options can you call?

10. Who should handle all the paperwork in processing the final contract?

11. Why does real estate abroad have a special importance today?