Buying an apartment to rent out
Renting out an apartment in Ukraine can bring a good income. But it is important from the very beginning to assess all the risks of this idea and to choose the right type of rental - long-term or short-term. In order for renting to bring stable income, you also need to find a suitable real estate option. This is one of the main conditions for the successful realization of the idea. We tell you which apartments are suitable for renting out, what criteria you should pay attention to when choosing accommodation and how much you can earn from this type of business.
Which apartments are best for renting out?
Before studying the criteria for choosing an apartment for rent, you need to decide how long you want to rent it for - daily or monthly. This determines what kind of property is worth buying.
Number of rooms in a rental apartment:
smart - smart apartments are not considered profitable for long-term renting, as the cost per square meter of such property is usually higher than that of a one-room apartment, while the rental price is lower;
studios are a good option for daily rent, but you should compare the cost with a one-room apartment, as in most cases the latter pays off faster. Such accommodation is in demand among tourists;
one-room apartments - the most actual real estate, both for daily and long-term rent. Most often such housing can be found at a democratic cost, while repair costs and utility bills will not be as high as in the case of larger properties;
two-room properties - the demand for 2-room properties is lower than for one-room properties, but it is not bad either. Such an option is worth considering if you plan to rent the housing to families with children for a short or long period of time;
three-room apartments and more - it is better not to consider large housing for rent. The demand for it is not as high as for compact versions of apartments, and for the amount you have to pay for a 3-room apartment, you can most often buy two two-room apartments.
If we are talking about the class of real estate, the most profitable solution is to buy a comfort-class apartment. It is easy to find tenants for economy class housing, but it brings a low income. Comfort class real estate can be profitably rented out, and it is not so difficult to find clients. Elite apartments threaten long downtime, although at the moment they bring high income.
An apartment for long-term rent can be with ordinary repairs, while for daily rent it is better to choose an apartment with a "zest". Those who rent a property for a few days, most often want to get bright positive emotions. If the apartment has its own "feature", it will have a constant flow of clients.
Secondary or new construction?
The real estate market offers many options of apartments for rent. Housing can be bought on the secondary market, in a ready-made new building or in a house at the construction stage. In order to understand which option will be the most profitable, it is necessary to compare prices, calculate costs and lost profits.
If you are considering secondary housing, the main thing is not to buy a cheap apartment in an old house. The costs of improving such an apartment and replacing communications will be so high that the payback period will be really long. When buying on the secondary market is also important to assess the size of utility bills, which can seriously reduce the liquidity of the apartment. However, in the secondary market you can find interesting options for daily rent, for example, in the historical center of Kiev.
The advantages of the secondary market for buying an apartment to rent out:
you can find relatively inexpensive real estate options;
you can find an option in any neighborhood;
you don't have to renovate;
you can rent the place out right away.
Many people believe that it is profitable to buy housing for rent in a new house at the construction stage. Indeed, the prices for apartments at the start of sales are the most attractive, but it is important not to forget about lost profits. You will have to wait for the house to be commissioned for 1-2 years: during this period the real estate will not bring income. It is also important to take into account the high costs of repairing the living space in a new building, purchase of furniture and other things.
A good option is to buy an apartment in a ready-made new building, especially with finishing. Such housing is more expensive, but you can start renting it out immediately. Most often it is easier to find tenants for it, as the apartment is bright, clean and new. New houses often have individual heating, which allows you to save on utility bills. This may interest those who plan to rent the living space long-term.
Advantages of new buildings for buying an apartment for rent:
you can save money when buying a home at the start of sales;
you can easily find an apartment with a good layout and fresh renovation;
you can save on utility bills through individual heating;
it is possible to choose non-standard objects that will attract tourists.
Which option is better - secondary or new construction, you need to consider individually, assessing the advantages and disadvantages of a particular object.
What is the best floor to rent out?
The most demanded floors in case of apartments for long-term rent are from the 3rd to the 7th. This applies to both new houses and the secondary market. The middle floors are in demand among tenants, as it is quieter than downstairs, and the air is cleaner. If the elevator breaks down, it is not as difficult to walk to the 3rd-7th floors as to higher floors.
If we are talking about daily rent, it is also better to choose an average floor. In five-storey buildings without an elevator, it is definitely not worth buying an apartment on the 4th or 5th floor. The optimal solution is the 2nd floor. View apartments on the upper floors are suitable for daily rent, but the demand for them has fallen due to the current situation in Ukraine.
What is the best neighborhood to buy a rental apartment in?
The location of a property can seriously affect its liquidity and the amount of passive income. If the apartment is being bought for long-term rent, it is worth paying attention to dormitory districts. An important advantage will be the proximity of the metro and public transportation stops, and the availability of infrastructure.
For long-term rent, you can also look at apartments in the city center. Such real estate is expensive, but the income from it is higher. The main thing is to correctly identify your target audience, find out what attracts them and what criteria play a significant role in the choice. If it is a modern renovation, then make it. In this case, it will not be difficult to find clients for the high cost of renting an apartment in the center.
The best areas for long-term rentals in Kiev are Svyatoshinsky, Goloseevsky, Obolonsky, Darnitsky. Such cozy dormitory districts are always in demand among tenants who are looking for long-term rentals. They are attracted by the abundance of green areas, embankment, good infrastructure, good transportation, playgrounds. Apartments in these areas may also interest students, as the leading universities of the capital are located in the immediate vicinity.
When it comes to daily rent, it is important to understand what the apartment will be rented for. If they are tourists, the proximity of the apartment to Kiev's famous sights, shopping and entertainment infrastructure, metro stations, etc. will play an important role for them. Those who go to Kiev for work, pay attention to how far the housing is located from the railway station, bus station, city center. It is also important to choose a house near which there is a cafe, restaurant, bank, public transportation stop.
Pechersk district is a great solution for buying an apartment for daily rent. But it is extremely difficult to find inexpensive housing here. If you buy a property in the historical center and make a good repair in it, the rent will bring solid money.
How much can you earn from renting out an apartment?
Investing in real estate for rent is understandable for many and can be really profitable if you choose the right object. The profitability of investments is influenced by several factors at once: the purchase price, depreciation of the apartment for rent, downtime, additional expenses. To understand how much you can earn from renting out a residential property, you need to consider each case individually.
In the situation with daily rent, a standard 2-room apartment in the central part of Kyiv with normal repair in the period of active demand can bring up to 1500-2000 dollars per month. The main expenses are spent on advertising, cleaning, consumables, taxes and utilities. The total amount of expenses is usually about 30%.
The average cost of a one-room apartment in Kiev when rented out for a long term is 13,000 UAH, a two-room apartment - 19,000 UAH. The income is lower than in case of daily rent, but it is important to realize that it is much more stable. The daily rental market is strongly influenced by seasonality, while the long-term market is not: people try to rent accommodation for a long period of time in order to move less.
The costs of renting an apartment for a long term are also considerably lower. Utilities are paid by the tenants. The landlord does not need to clean the apartment, buy consumables, and most often does not need to deal with minor repairs. The only expense is taxes, if the apartment is officially rented out.
If you want to buy an apartment for rent in Kiev, turn to professionals. Experienced realtors of the real estate agency "Mayak" will select objects that will bring maximum income.
