Golden Square: Discover the most profitable properties for rental and potential earnings.

Most often, property owners rent out their existing apartments – inherited ones, those bought for children "to grow into," or for the purpose of preserving capital. Intentionally purchasing real estate solely for rental purposes is not profitable, especially given the high mortgage rates and despite the strong demand in the rental market. This was the assessment of the market situation by Oksana Polyakova, Deputy Director of the Apartment Rental Department at INCOM-Real Estate.

— In the mass rental segment, almost all apartments, even the cheapest ones, are equipped with essential household appliances; the majority of properties have cosmetic repairs. If any adjustments, updates, or purchases of interior items are needed, everything can be completed after receiving the first rent payment from the tenant. Due to this "grandma's repair," the number of such apartments in the mass market is decreasing, — noted Oksana Polyakova.

However, it cannot be said that renting out such apartments is impossible. Considering the rise in prices and the acute shortage of rental properties in the market, almost anything can be rented out – either by lowering the rent or negotiating a lease "for renovation." In this case, the work is entrusted to the tenants, and the rental cost for them during this period is reduced by 10–40% depending on the extent and complexity of the repairs, or possibly the stay could even be free.

If the owner is renting out only one residential space inherited and requiring minimal investment for preparation, it can be said that they are receiving money with minimal economic, time, and physical costs.

— If you decide to buy a property as a conditional investment, meaning for rental, you should consider that the payback period for an economy-class apartment will be at least 20 years. For example, if you purchase a one-bedroom apartment for 10 million rubles and rent it out for 40,000 rubles a month — you will receive 480,000 rubles from the tenant in a year. But it is obvious that this is not pure profit, — noted Oksana Polyakova.

After choosing an apartment, it will take about a month to finalize the transaction and ownership of the property — meaning, due to downtime, it will not start generating income immediately. Next, we add expenses for preparing the property for rent — repairs, purchasing furniture, household appliances, and plumbing.

— Once tenants are found and the rental agreement is signed, you will regularly receive payment for accommodation, but from this amount, you will need to deduct the utility bills and housing services costs (in addition to what the client pays — electricity and water expenses), property tax, and income tax from the rent. Don't forget about the maintenance of the apartment and the natural wear of the property — you will need to pay for repairs of various breakdowns. If you bought the rental property through a mortgage, your rental income will go towards partial repayments on the loan, — added Oksana Polyakova.

When it comes to inexpensive houses, there are affordable rental options available. For instance, a house with an area of about 50 square meters typically has one bedroom and a large open space, along with a full bathroom. Such a house would cost approximately 4.5–5 million rubles. It may not be comfortable for a large family, but it is quite suitable for a young couple with one child. This type of project is also an ideal option for short-term rentals. This was shared by Vyacheslav Kotlov, the head of the construction company HalleHouse.

— There are also houses of 30 square meters. Some even have a loft floor. The cost of such housing is around 4 million rubles. So, it is possible to build a house with a small budget, — added Vyacheslav Kotlov.

There is a high demand for and always popular are inexpensive, well-maintained one-bedroom or two-bedroom properties. They should be located in somewhat remote areas, on the outskirts of the city (this condition is important for economical purchases and high demand from tenants), yet within walking distance from metro stations or the Moscow Central Circle (MCC).

Buying property on the secondary market in a modern building means you won’t have to invest much money in repairs and can be assured of the state of the utilities for a long time.

A newly constructed apartment with finishing at the early stage of construction is also a good option, but you need to keep in mind that for three years after commissioning, the building is considered a new construction with all the resulting living difficulties (repairs and noise from neighbors, unkempt courtyard and surroundings, underdeveloped infrastructure, etc.). According to Oksana Polyakova, in this case, the rental price should come with a discount of about 10%.

An apartment in an old five-story building will require tidying up, but it is a good option if the building is slated for demolition under a renovation program in the coming years: during these years, you can rent the property at a lower rate, but later you will be given an apartment in a new building — and you could rent it out for 20% more than a Khrushchyovka.

— If you are buying a property to rent out, choose middle floors, as apartments on the first or top floor will have rental rates that are 5–10% lower, — recommends Oksana Polyakova.

For those who already have assets for rental, it is essential to determine what level of financial investment is required for rental profitability. For example, the so-called "grandma's option" becomes competitive when the price is lowered by about 10% compared to the rental rate of a similar property in terms of rooms and square footage with modern renovations and furnishings. The same discount applies to renting empty housing, meaning without furnishings.

Another example: your property is in poor condition, but it is located in a prestigious area and a suitable building. In this case, it makes sense to invest, as the property could transition from the economy segment directly into the business or even premium class. And this would yield entirely different income.

It is commonly accepted that the norm for bringing housing into decent condition is an amount not exceeding two to three rental rates for it. However, each case is individual.

— For an amount up to 7 million, you can buy a house on the border of the Moscow region and adjacent areas. In the Vladimir region, in the Alexandrovsky district, you can acquire a full house with a plot of 6 acres. It is profitable to rent it out in the summer, as many mothers with children come here for summer vacations, and fathers visit them on weekends. And of course, during the New Year holidays. In the summer, the rent for such a house can range from 40,000 rubles a month to 100,000 rubles or more, depending on the infrastructure of the location, — shared Maxim Lazovsky, owner of the construction company "Dom Lazovskogo."

In Moscow, for this money, you can buy a cheap and very small studio, which will either turn out to be an apartment or a shared ownership in a former "large" apartment.

— Yes, theoretically, such housing can be rented for 35–40 thousand rubles depending on the area. But the apartments will have high utility costs and an increased tax burden for the owner. Additionally, a studio on the first floor converted from a former apartment can be "reverted" back into a room at any moment. Such renovations are not approved 90% of the time at the time of sale. And in 50% of cases, they cannot be approved at all. Draw your own conclusions, — added Maxim Lazovsky.