WHAT IS THE INCOME FROM THE REAL ESTATE ABROAD? SHORT-TERM LEASE PLUS

Buy to lease: 

A flat abroad is not just a chance to get closer to Europe, but a nice investment opportunity. Renting it out, you get a regular passive income of 8-15% per annum. And no special knowledge and need to participate daily in the management of this asset is required.

Certainly, additional rental income is a nice but non-compulsory option. You may decide to stay in the apartment yourself (or your family/friends), or just leave it empty. It's your personal preference. However, if you still intend to make the purchased apartment "work", use one of the three main ways.

 

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SHORT-TERM LEASE Plus

Plus — is a high - quality accommodation in handy locations from trusted owners. In its design, comfort and equipment it is at least equal to a nice hotel room. We are not talking about premium apartments, but just about those of very good quality: neat, cozy, with a balanced design, strong water height in the bathroom, not a squeaky mattress, fully equipped kitchen, bottled water, and well-arranged details. Such apartments are somewhat more expensive in furnishing (usually by 30-35% compared to the ordinary short-term lease). But once all the criteria are met, you are guaranteed with 3 months reservations in advance at a higher cost. So far, only Airbnb has launched the Plus platform, but it is likely to appear with competitors, like Booking and others, in the near future.

The process of relationship between the owner, the management company and the tenants is little if any different to that of the usual short-term lease.

 

 

 

WHAT IS THE SHORT-TERM LEASE PROCESS ABROAD?

The owner signs a contract with the management company and pays the costs of preparing the apartment for short-term rent. The management company takes over utilities (usually), hires a photographer, makes an attractive description of the apartment and posts it in short-term rental services. The Agency assists the guests in check-in and check-out, organizes cleaning, solves current issues, monitors comments, pays city taxes and utilities, transfers profit to the owner.

 

 

 

 

Advantages:

Disadvantages:

1. The highest income level;
2. Secured occupancy: easily forecasted the flow of revenues;
3. The cost of a property is growing faster, as the Plus-level apartments are located in the best areas of the city;
4. You may come to stay in the flat yourself any time.

 

1. Cost of the object and its furnishing is higher;
2. Restricted by local regulations in a number of cities.

 

 

Rental income — secured 10% per annum after tax. Taking into account the apartment cost increase, the average yield when renting it out for short-term rent Plus is 15% per year.

 

ALL IN ALL

Real estate is the easiest and free-to-all investment tool. You can rent almost any apartment, and in case the right location is chosen, you can rent it out for a quite high price. No need to spend time understanding stock indices and securities, as well as to take the risk related to venture capital investment. Real estate brings a conservative income, but its advantage is that it will always be in demand and has no "shelf life". For example, debt securities will be repaid sooner or later, but the apartment can remain your property and generate income for decades.