How to avoid mistakes when buying an apartment for rent (buy to rent an apartment): Irina Alazova's experience

The rental property market is full of temptations and hidden risks. Irina Alazova, as an experienced investor and head of Mercury Group, shares her investment strategy that helps avoid costly mistakes when choosing a property for rent.

Over the years, I have identified two most profitable segments that require different approaches: luxury real estate and budget options in new buildings.

At first glance, this segment seems risky due to the high initial cost. However, the right approach minimizes risks and guarantees a stable high income. Key success factors:

• Location, location, location: This rule is more relevant than ever. Choose prestigious areas with developed infrastructure. Not only the location of the house is important, but also the apartment itself: the view from the window, the floor, the entrance with access through the lobby and concierge, proximity to elevators, parking, the presence of a terrace.
• New building with developed infrastructure: Modern new buildings or completely renovated historical houses with concierge service, underground parking, a fitness center, a playground and other amenities attract solvent tenants willing to pay high rent for comfort (amenities).
• Layout and design: functionality and comfort. Thoughtful layout, high-quality materials and stylish, but not pretentious design are the key to success. It is important to create a feeling of coziness and expensiveness through quality and practicality. "Looks expensive, but doesn't cost much" is the motto of successful investment in this segment to obtain a high ROI.

• Security deposit: The high cost of the apartment allows you to set a security deposit of up to two months of rent, which will cover possible damage or late payments. This significantly reduces risks. We also recommend that the tenant prescribe mandatory insurance of the apartment.
• Long-term lease: Luxury apartments are usually rented for a long term to one tenant, which minimizes wear and tear and the cost of finding new tenants. The higher the budget of the property, the higher the quality of the tenant with an understanding of the need to preserve the property in its original form.
• Quick payback upon resale: Luxury real estate is a liquid asset. If resale is necessary, it will quickly find a buyer at a favorable price, since there are very few properties of this level on the market and they are usually purchased for living, not for rent. Demand will be guaranteed.

This segment is attractive due to its affordability. However, it requires a careful approach to choosing an object:

• Growing area: Choose areas with development prospects: construction of new infrastructure facilities, educational institutions, transport accessibility, the emergence of new jobs. Either the city center or a reservoir nearby is always a win-win option.
• Functional layout: the apartment should be comfortable and ergonomic even if it is only 25 m2. The correct layout will allow you to use the space as efficiently as possible.

• Modern design: even a budget apartment can be made a “candy” for very little money. If you have taste and vision, you can do it yourself. If not, you can hire a designer or broker who will get a quality product that will be rented out immediately at the highest possible rate.

Tenant profile: International student, pilots, mid-level employees of international companies, local young people, tourists.

Short-term rent: If long-term rent is recommended for luxury properties, then in the case of budget ones, short-term rent will bring more income, but also greater energy costs, such as handling reservations, etc. The choice is yours.

In conclusion, the success of investing in rental properties depends on careful market analysis, proper selection of the property, decoration and competent management.

By contacting Mercury Group, you will be able to competently select the property that best suits your goals and budget, minimize risks and receive a stable income from renting out.