Investors are at a loss: getting a good stable income is becoming more and more difficult. Deposit rates are falling following the key rate, and many segments of the real estate market have become unattractive for investments.
At the same time, new, more interesting investment niches have appeared. For example, profitable apartments that not only withstood the crisis period, but also continued to generate income for their investors. These apart-hotels have clearly defined investment programs and are managed by a professional management company.
It ensures the occupancy of the rooms and regularly pays out profit to the investor. Unlike the hotel segment, it was the apartments that managed to keep the occupancy rate, even despite the sharp decline in the tourist flow.
THE KEY TO SUCCESS BECAME REORIENTATION OF THE ROOM FUND FROM SHORT TERM TO MEDIUM AND LONG-TERM RENTALS. PLAYED THE ROLE AND FEATURES OF THE APARTMENT'S FORMAT.
The advantage of our segment over classic hotels is that the apartments have a separate kitchen area, so during the total lockdown we quickly switched to a new format, says Konstantin Storozhev, CEO of VALO Service.
“Thanks to this scheme of work, by June we managed to bring the occupancy rate to 50%, by the middle of summer it reached the planned targets of 80%. In August, about 90% of the room stock was occupied. For comparison: the city's hotels in the summer were occupied by an average of only 5-10%. At the moment, VALO Hotel City is 95% loaded, and we are more than satisfied with the result, ”the expert notes.
Income: maximum and guaranteed
Investment programs that allow you to receive income from the purchased apartment object differ in the principle of profit calculation. The highest income comes from progressive programs, where profit depends on the season and hotel occupancy. In the current reality, when not all borders are open and there are few tourists, guaranteed income programs are gaining popularity. According to their terms, the investor receives the minimum profit in any case.
For example, the investors of the VALO apart-hotel sign a trust management agreement with the management company (in separate buildings - also an agency agreement), which is subject to registration with Rosreestr. It fixes all the terms and amounts of guaranteed income payments, investors make a profit not in words, but in deeds.
“The program is very attractive right now, during the period of temporary instability of the tourism market. There is no maximum income limit under the Garant program, which means that during the high season you will also have the maximum profit. But at the same time, there is a minimum fixed amount of annual income - it is approximately 7.5–8% per annum of the amount invested by the investor for the purchase of an apartment and a package of equipment ”.
head of the department for work with real estate agencies VALO
Such an investment is more profitable than bank deposits, apartments for long-term lease and other investment proposals. For example, an apartment in the Mercure building with an area of 27.5 sq. m for the second year of work will bring at least 528 thousand rubles (on average 44 thousand per month). The guaranteed income program allows you to minimize risks and start making profits from the first year of the hotel's operation, regardless of external factors such as a crisis or a virus.
There is no catch here: the minimum amount of income that the management company guarantees under the contract is about 30-40% lower than expected. At the same time, the calculation of income from an apartment is done very carefully, all risks are already included in it. Consequently, it will not be difficult to ensure the guaranteed income for the management company.
The agreement on such a program is signed for five years. After this period, the investor can switch to another profitability program.
Trust but verify
VALO emphasizes that the choice of an investment object should be approached responsibly. “First of all, it is necessary to request from the management company a preliminary calculation of profitability and an action plan to achieve it and see how realistic the management company's plans are,” recommends Irina Gabova. "It is also important to assess the experience and professionalism of the management company."
It will not be superfluous to come to the apart-hotel and personally make sure of its work and occupancy. The first apart-hotel VALO Hotel City was launched on March 1, 2020 - its opening coincided with the start of the pandemic. A quick reaction of the management company and reaching 95% occupancy by autumn should be considered a very successful start.
“At the moment, we continue to focus on the loading of rooms in the medium and long term: we cannot expect to increase the tourist flow in the near future. We plan to work in the "medium" and "long term" mode throughout the winter, until the spring of 2021 ”.
CEO of VALO Service
The expert admits that market participants have great hope for the lifting of restrictions in the spring of 2021: the tourist flow, including from other countries, will gradually recover, apart-hotels will be able to return to their previous high
profitability. According to various sources, this is 12-17% per annum.
“According to our forecasts, rental rates in the winter period will be stable, with a slight upward trend in high-quality accommodation facilities,” says Konstantin Storozhev. - Payment for a month of accommodation in VALO Hotel City with already included utility bills will be within 40 thousand rubles. With this rate, we plan to load our room stock by 90–95% in the winter months ”.
More profitable than housing
It will be possible to invest in apartments not only by paying the entire amount at once, but also by taking advantage of the offers of mortgages and installments. Moreover, the rates are very attractive. One of the best offers on the apartment market is for buyers of units of the VALO complex: Sovcombank offers a special mortgage program, the rate of which is from 4.5% for the entire crediting period. Down payment - from 10%.