Real estate is one of the most profitable long-term investments. 30% of buyers choosing primary real estate buy apartments just for rent.
blago developer’s analytical center analyzed how long does it take to return money spent on one-room apartment in the suburbs and in the center of Ivano-Frankivsk.
Experts say that apartments of 45 sq.m are well suited for rental. They are comfortable enough to accommodate one or two people.
The difference in cost
Some buyers are convinced that due to high rental prices, it is quicker to make profit if you buy real estate in the center. However, housing in the suburbs also pays off fairly quickly, and one of the key factors is the cost of the apartment. The average price per square meter of one-room apartments in bedroom suburbs is UAH 10,700. For example, you can buy an apartment of 42 sq.m in the Comfort Park residential complex in Pasichna district for UAH 449,000. But housing in the heart of the city will cost more. Construction companies offer to pay UAH 16,000 for a square meter. The total amount is approximately UAH 672,000. You should also consider the costs that you will have to allocate for the renovation of a new apartment. This amount does not depend on the location of the property. In Ivano-Frankivsk, you will have to pay approximately UAH 250,000 for all materials and renovation works. Therefore, the total cost of a one-room apartment in the suburbs with renovation will be UAH 699,400, and in the center – UAH 922,000.
Daily or long-term rent?
When the apartment is ready to be rented, you should consider what type of rent is right for you. Daily rent means higher accommodation price per day. However, you may not always have tenants. On days when there are none, the owner loses money. If the apartment is occupied for 21 days a month, the annual income will be UAH 126,000 in the suburbs, and UAH 201,600 in the center. This is provided that the daily rent for the apartment is UAH 800.
At this level of income, the payback period of housing is 4 years in the suburbs and 5 years in the center.
If the owner of an apartment has chosen a long-term rent, the income will be less than with daily rent, but regular. The owner of an apartment will consistently receive UAH 4,000-6,000 per month in the suburbs and UAH 7,000-8,000 in the center. This makes up to UAH 72,000 per year. In this case, the payback period is 9 years. But apartments in the city center allow you to earn UAH 96,000 per year. The total payback period of such housing will be approximately 8-9 years.
When the apartment pays off, it can be sold profitably. After all, the cost per square meter of real estate increases every year, and respectively, the price of an apartment will increase as well.