Update from the originator:
the project generates 443.20 EUR in rental income per month, which means an annual return of 7.55% for investors.
|Criteria||From a+ to d||Project rating|
Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
We are excited to introduce the first buy to let InRento project from the city center of Vilnius, Lithuania. InRento is the first European buy to let originator that is regulated by the Bank of Lithuania and investments are secured with mortgages. InRento is our partner platform and has the same shareholders as EvoEstate (Gustas Germanavičius and Audrius Višniauskas).
We believe that this is a really attractive project due to its central location in the capital of Lithuania, Vilnius, and the already existing tenants that are paying on time. The annual interest rate for the current contracts for this project is 7.55% or a net of 443.20 EUR which is above the medium interest rates that you can find for similar projects. On top of this, investors have a guarantee in form of a first-charge mortgage.
InRento is proud to introduce the first buy to let investment opportunity by a regulated platform in Continental Europe. The investment case is comprised of 2 Rental properties are located in the central area of the city in the address of A. Goštauto g. 8, Vilnius.
Currently, both of the properties are rented out and are generating a total of 554 EUR per month of rental income. The current absolute yield is 554 EUR per month, which results in a 9.44% gross rental yield.
The net rental yield is 443.20 EUR for the distribution to the investors, or in a percentage value equal to 7.55% per annum NET with the given situation of the tenancy.
Reasons to invest in 2-micro offices in Vilnius:
Office #223 (which consists of 13,76 square meters area) is rented out to a company that is working in the logistics industry. The tenant is paying 260 EUR per month for rent and the outstanding rental contract is valid until 2021 09 30.
#224 (which consists of 17,94 square meters) is rented out to a company working on Cars parts imports. The tenant is paying 294 EUR per month for rent and the outstanding rental contract is valid until 2021 02 17.
Financial terms of the investment:
InRento investors are granting a loan to the borrower for the acquisition of the rental properties. The loan is secured with a first-charge mortgage which in time of borrower’s inability to fulfill financial obligations would be used to repossess the asset.
The revenue-share between the borrower and the investors is set at 80/20, meaning that the borrower is obliged to distribute 80% of the income to the investors. The current absolute yield is 554 EUR per month, which results in 443.20 EUR distribution to the investors, or a percentage value equal to 7.55% per annum with the given situation of the tenancy.
What would happen if the tenants would leave the property?
In an unlikely scenario of both of the tenants canceling their tenancy, the borrower would be paying a 1% annual interest rate until the new tenants would be found. If the borrower would not rent out the assets within 3 months, the fixed-interest rate would be increased to 4% per annum.
What will happen when the property will be sold?
When the property will be sold and it will be sold more expensive than it was acquired. The capital growth will be distributed in the following structure: 70% investors / 20% borrower / 10% InRento.
The project owner:
The borrower- UAB Real Assets, is a newly established legal entity to serve as a special purpose vehicle for a purpose of increased security for the investment. The manager of this company has been working in the Real Estate industry for the last 15 years. He has successfully commercialized residential, commercial and hospitality projects internationally and counts numerous successful sales of companies operating in the real estate industry.
Key investment risks:
Risk of falling prices: the price of the property might fall due to the increase in supply or decrease in demand in the area or other economic factors.
Liquidity risk: The borrower might be unable to find a buyer to sell the property.
Tenant risk: Although the assets currently are fully rented out, there is a risk that the asset can lose the tenant and it can take time to find the new tenant.
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