220 000.00 €
Type: Buy to Let
Mortgage rank: First
Interest payment schedule: Monthly
Min. amount of investment - € 100
Update from the originator:
The originator is pleased to inform you that a new rent contract has been signed for the Studio Apartments project. The contract is valid for one year. The project's occupancy is again at 100% and rental income (interest) for investors hasn't changed: +7.36% per annum.
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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
The strength of this project is that the yield, which is already very high at 7.4% per year, could increase to even more in the coming years.
This increase could happen mainly due to 3 reasons:
1. The apartments are rented out for 230€, 250x4€, 280€ per month. Most of them should be rented out the next season for at least 280€ per month.
2. The rental prices are increasing in Vilnius for the residential type, similar to those apartments.
3. It is almost impossible to find newly refurbished apartments within the city area for less than 300€ per month.
If we take into account the historical capital growth of similar properties in the area, this project could generate an additional 6.69% per year that will be paid when the property will be sold. This percentage is calculated on the price of the property and it does not take into account the percentage of profit-sharing received by investors. Investors should consult the project's description in order to understand how much from the potential historical capital growth will be received, based on the amount invested.
Another aspect of this deal is its location. It may look like it’s in a suburb, but there’s a 2-line road almost like a highway straight to the old town of Vilnius. It’s just a 10-15 mins car ride. This means that if you work in the center you are able to get there really quick.
Additionally, the activity scene of production and industry are close by, so there are plenty of jobs in these fields close to the property.
It is also very important to notice that this project generates income from the day of investment (you don’t need to wait until the project is fully funded and all the paperwork is done in order for your investment to actually start generating income).
The property was also fully refurbished in 2019 and the developer has made it in relatively high quality and installed good home appliances of the Electrolux company.
The area where these studios are located is growing and has experienced continuous growth in prices for several years.
With this particular project, the project owner will already mortgage this property next week for the originator and automatically for the investors, unless anything unexpected comes up. This way, the money will be transferred already in stages when the property’s mortgage will be registered in the name of the investor’s representative - InRento.
So, if the project is funded by 50%, for example, on April 15th, the borrower will transfer for investors 50% of rental income that day.
In this particular case, the seller has sold the asset, but he will only receive the full amount after 60 days after the property has been fully mortgaged for the investors.
The actual tenants have entered the last 12 months of their contract and right now they have the option to extend their rental contract or new tenants will be found. Investors will receive 1% for the first three months of the property not having a tenant and if there will be no tenant over these three months, the interest rate will rise to 5%. This means that investors will always receive interest payments, no matter the grade of occupancy of the property, an aspect that you can’t achieve while investing traditionally in real estate (buy and rent).
These are the comments of InRento's CEO, Gustas Germanavicius, that were shared on our official Telegram group where investors can interact with us and other investors and be up to date with any news regarding EvoEstate and its partners. Investors can join this group by pressing on this link -> https://t.me/EVOestate
InRento is introducing the new buy to let investment opportunity. The investment offer consists of six studio apartments located in the capital of Lithuania, Vilnius.
Currently, the properties are rented out and are generating a 1.500 EUR per month of rental income, which results in an 8.18% gross rental yield.
The net rental yield is 1.350 EUR that is distributed to the investors, or in a percentage value equal to 7.36% per annum net with the given situation of the tenancy.
Reasons to invest in residential premises in Vilnius:
The tenants are natural persons and paying 1.500 EUR per month for rent and the outstanding rental contracts are valid until 2021-07-06.
Capital growth change:
Prices of apartments in this district of Vilnius increased +18,8% in the recent year, while in the last five years the change was +33,47%. Recently, there has been a significant increase in the interest of investors and residents in this district of Vilnius, and this is reflected by data.
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 case of the 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 90/10, meaning that the borrower is obliged to distribute 90% of the income to the investors. Current absolute income is 1.500 EUR per month, which results in 1.350 EUR distribution to the investors, or in a percentage value equal to 7.36% per annum with the given situation of the tenancy.
What would happen if the tenants would leave the property?
In a scenario of the tenant canceling the tenancy, the borrower would be paying a 1% annual interest rate until the new tenant would be found. If the borrower would not rent out the assets within 3 months, the fixed-interest rate would be increased to 5% 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: 45% investors / 45% borrower / 10% InRento.
15,000 - 29,999 EUR - the capital growth will be distributed in the following structure: 50% investor / 45% borrower / 5% InRento.
30,000 EUR and more - the capital growth will be distributed in the following structure: 55% investor / 45% borrower.
Rental income (interest):
This project has a 60 days funding period. This project has a 60 days funding period. This project rental yield will be distributed on April's and May's 15th day even if the project would not be fully funded.
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 investments on InRento. The manager of this company- Justas Kaveckas 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 in order to sell the property.
Tenant risk: Although the assets currently are fully rented out, there is a risk that the asset can lose the Tennant and it can take time in order to find the new tenant.
Investing with InRento, is similar to owning a rental property, however with us you don't have to worry about day-to-day property management and in the periods of vacancy, the borrower is required to distribute fixed-interest payments
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