Renting as a way to make money on foreign property

Clients use our services for three distinct reasons: moving and permanent residence, a seaside holiday (saving money), and profit.

Renting or buying a home at the lowest possible price in the initial stages of construction and reselling at the completion price (usually 30-50% higher) after commissioning can be profitable.

This post is about the various sorts of rent and their profitability worldwide.

Short-term rental (daily)

Short-term rentals are most common in popular tourist cities: Amsterdam, Barcelona, ​​Valencia, Mallorca, Istanbul, Paris.

In contrast, yearly rent allows you to make far more money than long-term rent, about 7-12% per year. There are several wrinkles, though. To begin with, homeowners must have a specific license to let out their properties. Owners of apartment buildings that offer lodging without having a valid permit may be fined.

At the same time, in some areas, for example, Alicante, Barcelona, and Mallorca, new licenses were temporarily halted owing to a market glut, so it's wise to purchase apartments with a valid license.

In 2017, Turkey imposed a ban on individual daily rent. Individuals are only permitted to charge day-to-day fees if they have the proper license and fulfill several criteria: more than 30 beds; infrastructure meets that of a regular hotel - 24-hour security, video surveillance system, fire escape.

Every year more and more countries begin to introduce such restrictions.

Examples of apartments from our catalog with a tourist license for short-term rental:

• Furnished apartment with an account on Airbnb
• Apartments in an apart-hotel on the 1st line in Santa Ponsa. Rental license
• Fantastic villa with tourist license in Cap Falco
• Villa with rental license
• Apartment with tourist license in Benicalap
• Apartment with tourist license in the center

A modest apartment with one or two bedrooms in a modern complex with hotel services is an ideal short-term rental item. The prospect of having access to public transportation stops in a major city or being near the beach's first line is essential, as is the view of the sea/sightseers, proximity to entertainment, dining, and shopping options.

Advantages of a short-term lease:

• higher income

Cons of short-term rent:

• the need for a tourist license
• more hassle (meeting guests, check-in / check-out, apartment cleaning, necessary repairs of equipment and furniture)

Long term rental

Anyone who wants to make money on rent and not deal with this issue on their own can consider the option of a long-term lease. Less hassle, stable income: all worries about the apartment - the search for tenants, check-in and check-out, transfer of funds received, cleaning and repairs if necessary - are taken over by the management company. Her services are 15-30% of the rental price.

This type of accommodation is frequently rented by locals, freelancers, and workers at firms working remotely. Many of our clients rent this property for their retired parents and children during the long summer and Christmas vacations.

In terms of long-term rentals, the average net income is 3-6 percent per year in Europe and 7-8 percent in Turkey and Thailand.

Some resorts aren't ideal for long-term rentals. In Bulgaria, for example, real estate in Varna or Burgas is preferable since it is more appealing; in Turkey, Antalya and Alanya are better options because the income is higher there; in Istanbul, a maximum of 5%; and so on.

Even in the territory of one resort, there are more and less suitable areas for rent. For example, the Mahmutlar district in Alanya is full of offers, so there is more competition here.

Avsallar is an ideal spot for a fun family holiday, but it is not suitable for extended employment due to its 20 kilometers from Alanya.

The proximity of schools, clinics, shopping malls is much more crucial to residents than beaches and clubs, and easy parking is a more excellent selling point for them than sea views.

Options for long-term rental in our catalog:

• Apartments at the lowest prices! Guaranteed income 7% per annum
• New apartments in the center of Istanbul
• Apartments in the area Esenyurt 
• Apartments in the center of Alanya, Cleopatra beach

Benefits of a long-term lease:

• stable income throughout the year
• less hassle and risk

Cons:

• less income compared to the daily rent

Guaranteed rent

Projects with a guaranteed rental income appear on the real estate market. For example, Wyndham, Marriott, Best Western, and Sheraton may operate an apartment complex built by the developer.

The owner of the apartment agrees with the management company. Under this agreement, a certain amount is paid every year, regardless of whether rented an apartment or not.

In Europe, the average guaranteed yield is 4-5% per year. In Thailand, you can earn a net 6-10% gross in hard currency each year if you spend $100,000 on an apartment and earn $7,000 annually.

At the same time, you may unwind in your Phuket apartments for a month each year, usually during the low season - from June to September.

It's critical to hire the right hotel management firm with prior success in the business. When Sheraton or Best Western manages the property, you can be confident that you'll receive top-notch hotel service, staff training, a large client base, and most importantly, a well-known brand for which people are ready to pay extra at times.

A long-term guaranteed contract provides several benefits over a month-to-month rental. One major perk is that the owner does not have to pay maintenance fees. Everything in the contract is specified, including the purchase, revenue, personal use apartment terms, and sale, that is, buyback. In stable currency, 7% - income

Benefits of a guaranteed rental:

• fixed income for several years
• less risk and nerves
• the right to rest in the apartment for several weeks is granted

Cons of guaranteed rent:

Self-renting deprives the owner of the profit that can earn by renting.

Examples of properties with guaranteed rent that you can buy right now:

• Hayat Residence in Mahmutlar
• Apartments in Mahmutlar, Alanya
• Income apartments. Guaranteed income 10% for 25 years
• Student apartments. Yield 9%
• Apartments in a 5* complex with an income of 7%. Wyndham management. Kamala Beach
• Apartments on the 1st line of the Rawai beach, Best Western management. Income 10% per annum

Summary

It's critical to get the right rental program! Each of them has its own set of intricacies. We'll be delighted to help you choose an excellent investment opportunity.

If you're looking for a long-term and assured rental, you've come to the right place. We'll be glad to assist you in selecting an overseas property to meet your needs and criteria!