Investing in a condominium more profitable than traditional forms of increasing capital
Times of low inflation are conducive to investing in property. When looking for appropriate premises to rent, it is worth choosing proven business solutions guaranteeing solid profit. Buyers of condominiums in the Nowa Motława aparthotel on Wyspa Spichrzów may expect an annual average rate of return of 7% on their investment.
The Nowa Motława aparthotel forms part of the latest Dekpol SA project implemented on Wyspa Spichrzów in Gdańsk. The hotel building has a total area of over 5,200 m2 and comprises 174 hotel units measuring between 22 and 41 m2 sold as condominiums.
“Why is it profitable to invest in such a property? When buying a condominium in the Nowa Motława aparthotel, one acquires the right to ownership, so one can use the condominium for a vacation or during a business trip. However, when the unit is not used, it is rented by a company specialising in managing such property,” explains Mariusz Tuchlin, President of the Management Board of Dekpol SA.
Apart from servicing a given transaction, such a company is responsible for actively promoting one`s property. Its expertise and efficiency are a key success factor in ensuring continuous rent.
“In theory, the owners themselves could deal with renting; however, such a solution would be time-consuming. As we know time is money, so if one buys property for investment purposes, it is better to entrust renting it to professionals. It is all the more profitable as it does not involve any additional costs,” says Mariusz Tuchlin.
The hotel operator also provides comprehensive services to guests from the moment they book an apartment, including the provision and collection of keys, cleaning, changing bedlinen, repair and maintenance services and finally financial settlements. “Thanks to such a solution, the owners do not have to get involved in renting their apartments. This is particularly important in the case of people interested in investing in property situated outside their place of residence,” adds Mariusz Tuchlin.
Condominiums are rented mainly for a short period of time, so it is important that one`s property has an attractive location. “Wyspa Spichrzów, where the Nowa Motława aparthotel will be developed, boasts a waterfront location and it neighbours on key monuments of the Old Town.This once industrial and storage space in Gdańsk is now undergoing thorough regeneration. Over the next couple of years, the island stands a chance of becoming one of the most popular places with tourists, who form the key target group for short-term rents,” says Mariusz Tuchlin.
The number of tourists visiting Gdańsk increases by around 10% annually. The number of foreign visitors is also growing every year, in particular from Norway and Sweden, for whom Gdańsk is an increasingly popular destination.
It is worth underlining that in the case of condominiums, the tenants get not only a place to sleep and relax, but also a complete hotel infrastructure. “Catering services, facilities such as a swimming pool, Jacuzzi, gym or sauna, 24/7 reception services or smart management systems such as SMART TV or BMS are factors that make a property more attractive for tourists, who decide to choose it as a result,” says Mariusz Tuchlin.
However, shorter rent periods of condominiums do not translate into lower profits in comparison with renting standard housing units. “All thanks to the guaranteed rent, amounting to 33% of the net price of the property acquired during the first 5 years of the operation of the Nowa Motława aparthotel. Between the 6th and 15th years the proportional rent will amount to 50% of the revenues from accommodation services. This gives an annual average rate of return of 7% on one`s investment, which is very attractive in comparison with traditional capital investment methods,” explains Mariusz Tuchlin.
In comparison, in the case of traditional, long-term apartment rent one can expect a maximum rate of return of 4% annually. “Other financial products are even less profitable, as one-year bank deposits or Treasury bonds bear interest of slightly over 2%. The calculations speak for themselves. These days investing in condominiums is the safest way to increase one`s capital,” says Mariusz Tuchlin.
Profit is additionally guaranteed by rising accommodation prices in the Tri-City. According to an analysis prepared by Trivago.pl, over the past year rents in Gdańsk have risen by a massive 12%.
Who is interested in acquiring such property? “The Nowa Motława aparthotel is an ideal solution for those who dream about having their own apartment at a holiday destination but at the same time want their property to pay for itself. Buying a condominium on Wyspa Spichrzów is also a profitable investment instrument guaranteeing solid profit for every year that the facility is in operation. It is also an interesting proposal for those who already have several apartments for rent, but who wish to diversify their investment portfolio. Such an apartment may also prove interesting for those who make regular business trips to Gdańsk. When visiting the city, instead of staying at an ordinary hotel, they prefer to stay at their own apartment and, after an intensive day at work, relax in a swimming pool or use other amenities that will be available in the complex. Finally, foreigners are increasingly interested in buying property for short-term rent. When visiting the Tri-City for their vacation, they are thrilled with the dynamic development of this part of Europe and then later they decide that this is where they want to increase their capital,” says Mariusz Tuchlin.
Dekpol SA is the Developer and General Contractor of the Nowa Motława aparthotel. Apart from the condominiums in the hotel section, the complex of five connected buildings will also comprise 298 housing units. The architectural design has been prepared by the renowned architectural studio of Kozikowski Design, whose projects include the reconstruction and development of the Polish Baltic Philharmonic. Dekpol has already started selling units and the facility is scheduled to be put into use in January 2017.