Let's imagine that you didn't inherit an apartment, but passive earnings - it is all you want, what then? We offer to consider how to buy an apartment for rent in Kiev. Newbie investors naively believe that purchasing an apartment for rent will make their life cloudless, but is it really so? Let's figure it out further.
Should you buy an apartment to rent?
It is no secret that many people are worried about the financial implications of such a transaction. However, there is nothing difficult here, and experts say that it is important to understand the relationship between investment and return on investment. For example, the average payback period for a new economy-class apartment for rent is about six to eight years. If you take the risk and try to buy an apartment for renting a business class or an elite apartment, the payback period can reach 15-20 years. These statistics are given after taxes and utility bills have been taken into account. Buying a home to rent is probably not practical unless you are serious about it. If you are a beginner and want to try something new, subletting is a perfectly acceptable option.
Long play or one time play?
When choosing an object for rent, it is necessary to determine the goals that you are pursuing. For example, if we talk about apartments for daily rent, then location does not always play an important role. Apartments for daily rent may not be located in the most elite areas. When choosing an apartment for living for a few days, many are looking for a place with good transport links, and not with a beautiful fountain or Greek columns nearby. Therefore, in the process of choosing and buying an apartment for rent, you need to understand what type of lease you are considering.
Long term rental - a good option for passive income, because it almost does not require your attention. Once you bought an apartment for rent, found a worthy tenant and that's it, you receive a monthly transfer to the card in the form of the amount prescribed in the lease agreement. The obvious disadvantage of this type of lease is the payback period, which is quite long.
Daily rent is a “quick” option for passive income. You don't have to wait months to get paid. However, buying an apartment for daily rent requires much more care and attention. Here you will have to do cleaning, frequent repairs and monitor the safety of property. However, today you can leave this hassle to service companies, if you are, of course, ready to give away about 30% of your net profit. By the way, if you decide buy a house in Kyiv, we recommend contacting the best luxury real estate agency THE Capital.
In addition, an apartment for daily rent requires regular advertising, so as not to be idle, but to receive new clients. A real estate agent can do this, but again, agency involvement will eat up some of your income. Also, the profitability of daily apartments is much more difficult to calculate, since it is necessary to take into account the competition.
Which apartment to buy for rent?
- Small, but daring. An apartment with a small square area, which, in addition, can be immediately repaired, equipped, without having to pay a large utility fee.
- Everything is near. With highways, within walking distance from public transport stops, schools, markets, etc.
- New and clean. Apartments in new, glamorous, clean and tidy homes less than 5 years old.
- Materials. Housing made of high quality, modern materials (brick, monoliths). This is one of the decisive factors in the question of whether it is worth buying an apartment for rent. Since hardly anyone wants to live in a house with a leaking roof or loose walls.
- Security. Comfortable housing, with good communications, in a green area of the city, preferably near a park.
- Reliability. It is also advisable to choose an apartment from a reliable developer if you are considering investing in a pit.
The advantages of buying an apartment for rent
Investing in square footage is one of the oldest ways to increase your savings. And while you are deciding which apartment is better to buy for renting, below we have given 3 main advantages:
- Simplicity and affordability, it is not difficult for a beginner to understand the essence of such an investment.
- Conservatism, the rules and laws of the real estate market have been established for a long time.
- Stability, risk-free investments do not exist at all, but investing in the real estate market requires much less risk than in other areas.
As long as people need a roof over their heads, apartments will be in demand, and there are a lot of obvious advantages in favor of your question: is it profitable to buy an apartment for rent. By the way, it is for this reason that real estate is the second most popular investment product after bank deposits.
Read more:: What is self-construction and how to legalize it?
Stages of buying an apartment for rent
You have decided on the type of lease, learned what to look for when selecting real estate, and now let's figure out in more detail how to buy an apartment for rent and get acquainted with the stages of selecting an apartment for rent.
- Pick up the area
Pay attention to the most popular sleeping areas, this is important for both long-term and daily rentals.
- Decide on the class of housing
Economy class apartments will cost less. However, in the long term, they will require major renovations and lower rents. Developers are generous in everything - from the condition of the apartment at the time of transfer, the choice of building materials to the infrastructure. As a result, the payback period for economy housing is the same as for the middle segment, which, you must agree, is a significant advantage to buy an apartment to rent out.
Read more:: Where is it better to buy an apartment: in a new building or on the secondary market?
- Prepare your apartment for moving in
If a long-term rental is a deliberate decision, then a daily rental is an impulsive, “emotional” decision. Make your apartment bright and you will see that your guests will recommend your place to their friends. It is not enough to stick cheap wallpaper and lay colorful carpets; you need to make sure that people in your apartment feel at home. The apartment should have its own personality.
Despite periodic downturns in the rental market, many people make good money in this business. Try your luck and you, because a successfully purchased apartment for rent is not afraid of crises. Subscribe to our updates real estate portal and get the latest publications from the real estate agency THE Capital.
