08-05-2024
Investing in real estate for rental income is a popular way to generate passive income. However, to make the deal profitable, it is necessary to consider a number of important factors. What are they? Irina Alazova explains.
Choosing the Property
The first step is to choose the right investment property. If you are buying an apartment specifically for renting out, pay attention to new buildings with convenient infrastructure, such as:
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Proximity to schools (for families with children) or universities (for students)
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Good transportation accessibility
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Availability of shops, cafes, and other social facilities
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New housing typically requires less expenditure on repairs and maintenance, allowing for quicker returns on investment.
Buying the Apartment
Investors can be individuals or companies. It is important to analyze the market, cash flows, and choose the optimal purchasing option, optimizing taxes. For example, it is advantageous for a company to purchase a new building directly from the developer.
Rental Options
You can rent out the property for a long term - from 12 months and longer, or for short term - daily rental.
With short-term rentals, if there is a stable flow and the property is located in a tourist area or has some advantages, the return on investment is usually higher. You can manage reservations, check-ins/check-outs yourself or engage an operator who will manage your property for a certain percentage.
With long-term rentals, which yield lower returns than short-term ones but are more stable, with good tenants - you need to draw up a rental agreement once, settle the tenants, and then monthly monitor rent and utility payments.
Attracting Tenants
To attract reliable and financially stable tenants, it is necessary to:
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Set an appropriate rent
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Work on the apartment's design, make it appealing
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Launch a targeted marketing program
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A well-drafted rental agreement that specifies all conditions will help avoid potential disputes in the future. It is also important to pay attention to registering the rental agreement with the tax authorities.
The article lacks all the nuances, so we offer individual free consultations. By following our advice, you will be able to profitably buy and rent out an apartment and ensure yourself a stable income.
Mercury Group has been specializing in long-term and short-term rentals for over 20 years. We will quickly find the right apartment, house, or commercial property for you for a period of 1 year or more. We have exclusive access to a database of apartments and houses in Riga, the Riga region, and Jurmala.
