Let's imagine that you did not inherit an apartment, but passive income is all you want, what then? We suggest considering how to buy an apartment for rent in Kyiv. Newbie investors naively believe that buying an apartment for rent will make their life cloudless, but is it really so? Let's figure it out further.
Is it worth buying an apartment for rent?
It's no secret that many people worry about the financial consequences of such an agreement. However, there is nothing complicated here, and experts say that it is important to understand the relationship between investment and return. For example, the average payback period for a new economy class apartment for rent is about six to eight years. If you take a risk and try to buy business-class apartments for rent or an elite apartment, the payback period can reach 15-20 years. These statistics are given after accounting for taxes and utility payments. Buying a rental property is probably not a good idea unless you are serious about it. If you are new and want to try something new, subletting is a perfectly acceptable option.
Long game or one time?
When choosing an object for rent, you need to determine the goals you are pursuing. For example, if we talk about apartments for daily rent, location does not always play an important role here. Daily apartments may not be in the most elite areas. When choosing an apartment to stay for a few days, many people look for a place with a good transport interchange, and not a beautiful fountain or Greek columns on the side. Therefore, in the process of choosing and buying an apartment for rent, it is necessary to understand what type of lease you are considering.
Long-term lease — a good option for passive income, because it hardly needs 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 specified in the lease agreement. An obvious disadvantage of this type of lease is the payback period, which is quite long.
Daily rent is a quick passive income option. 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 deal with cleaning, frequent repairs and monitor the preservation of property. However, today you can leave this trouble to the service companies, if of course you are 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 elite real estate agency THE Capital.
In addition, an apartment for daily rent requires regular advertising in order not to be idle, but to receive new customers. A real estate agent can do this, but again the agency's involvement will eat into your income. Also, the profitability of daily apartments is much more difficult to calculate, since competition must be taken into account.
Which apartment to buy for rent?
- Small, but far. An apartment with a small square footage, which can be immediately repaired and furnished, without the need to pay a large utility bill.
- Everything is nearby. With transport highways, within walking distance of public transport stops, schools, markets, etc.
- New and clean. Apartments in new, glamorous, clean and tidy buildings less than 5 years old.
- Materials. Housing made of high-quality, modern materials (bricks, monoliths). This is one of the decisive factors in the question of whether it is worth buying an apartment for rent. Because 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.
Advantages of buying an apartment for rent
Investing in square footage is one of the oldest ways to increase your savings. And while you decide which apartment is better to buy for rent, below we have listed 3 main advantages:
- Simplicity and accessibility, it is easy for a beginner to understand the essence of such an investment.
- Conservatism, rules and laws of the real estate market have been established for a long time.
- There are no stable, risk-free investments 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 many 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.
See also: What is self-development and how to legitimize it?
Stages of buying an apartment for rent
You have decided on the type of lease, learned what to pay attention to when choosing real estate, and now we will understand in more detail how to buy an apartment for rent and familiarize ourselves with the stages of selecting an apartment for rent.
- Select a district
Pay attention to the most popular sleeping areas, this is important for both long-term and daily rentals.
- Decide on the housing class
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, let's face it, is a significant advantage of buying an apartment to rent.
See also: Where is it better to buy an apartment: in a new building or on the secondary market?
- Prepare the apartment for occupancy
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 accommodation to their friends. It is not enough to paste cheap wallpaper and lay colorful carpets; You need to make sure that people feel at home in your apartment. The apartment should have its own individuality.
Despite periodic downturns in the rental housing market, many people make good money in this business. Try your luck and you, because a successfully bought rental apartment is not afraid of crises. Subscribe to our updates real estate portal and receive the latest publications from the real estate agency THE Capital.
