This article was published in leading Lithuanian news media Delfi.lt
With solid returns and track record locally, investment platform InRento is now expanding its activities to Poland
InRento – a Lithuanian start-up that offers an innovative way of investing, expands its activities and opens new opportunities for investors. EU's first and largest licensed buy-to-let crowdfunding platform will continue to work with properties not only in Lithuania and Spain but also in neighbouring Poland.
Last year was very successful for investors
Although 2022 was a challenging and unstable year for the financial market, it was a successful year for InRento investors: the platform was first in Lithuania in terms of average return rate, whilst the realised projects generated an average annual return of 15.35%. Investors were able to earn a more solid annual return thanks to thoughtful investment decisions, such as indexation of interest rates and the possibility of earning additional income from capital gains after the profitable sale of the buy-to-let asset.
"High inflation was a major concern last year, but it did not become an obstacle for our investors, as many of InRento's projects have interest indexation. This means that even if inflation is rising very fast, the real return on investment may not be reduced. The value of real estate assets tends to rise during inflation, so investors can earn money not only from interest, but also from the successful realisation of the assets. In this case, the profit earned from the appreciation is shared between the project owner and the investors," says Gustas Germanavičius, founder and CEO of InRento, which was recently recognised as the best investment technology in Europe.
The rental market in Poland is highly attractive
So far, InRento, a platform which unites a community of more than 15,000 investors, has offered to invest in buy-to-let projects in Lithuania and Spain, and since March this year it has opened its doors to the Polish market.
“There are only very few countries in Europe where rental yields are genuinely high, and I would highlight - Lithuania, Spain, Ireland and Poland. The Polish market, in particular, is well developed and attractive for investors", says G. Germanavičius.
The CEO of InRento points out that now is a favourable time to invest in buy-to-let projects in Poland as the demand for rental housing has been trending upwards. This has been influenced not only by the increase in immigration over the recent years but also by the war in Ukraine.
"The increasing number of immigrants has significantly impacted the rental market – as demand has increased, thus the cost of rental accommodation has risen. For example, the number of immigrants in Poland was tens of times higher than in Lithuania, so the demand for rental housing increased significantly. As a result, it became more difficult to rent properties in both smaller and larger cities,” – says G. Germanavičius, adding that real estate developers are working hard to create more supply, both through real estate development by building new houses and through real estate conversions, for example, converting factories into residential lofts that have been very attractive in recent years.
Thoughtful safeguards help you earn and protect your investments
Although the Polish real estate rental market has also been attractive in the past, potential investors have often been pushed back from investing in properties within the country because of potential currency risk.
"Poland has its currency and its monetary policy. This means that before investors had to assess the exchange rate and bear the currency risk if the rate moves against the investor. "InRento offers its investors the possibility to invest in euros, so the direct currency risk is not taken by the investor, but beared by the project owner", the founder of the platform comments on the safeguards in the platform.
InRento plans to offer buy-to-let projects in major Polish cities with high demand for rental housing, allowing to earn solid and, in many cases, double-digit returns.
Residential and short-term rentals are the main focus areas of investments in buy-to-let projects in Poland. Housing and short-term rental projects currently make up around 60% of InRento's portfolio. According to G. Germanavičius, this strategy was chosen for a reason:
"Housing affordability is and will continue to be one of the biggest challenges of the 21st century in Europe. The proportion of the population owning real estate is decreasing, and this trend seems set to continue. Another point is that the residential segment is historically safer than the commercial segment. While the commercial segment often leads to higher returns, it also usually means taking on more risk".
First project in Poland in cooperation with Lithuanians
The first project in Nowy Sacz in Southern Poland, where InRento offers to invest, is being carried out by a large Lithuanian developer.
Nowy Sącz – a city in Poland with a relatively small area and population. According to the statistics for the end of the year 2021, there were only 370 housing units per 1,000 inhabitants in this city. This figure reflects the high demand for rental housing. In comparison, the average number of housing units per 1,000 inhabitants in Lithuania in 2019 was 519, according to the Lithuanian Statistical Yearbook.
G. Germanavičius says that after raising the necessary funds to complete the conversion, a building with more than 2 700 square meters will be converted into 56 different residential rental properties. This project is appealing to the investment community because of its potentially higher returns and relatively low risk, as the developer is well-known in the market and has a strong track record of successful operations.
"In the three years that we've been in business, we have not experienced a single project being late. For most projects, the project owner's return from the rent is higher than the interest paid to investors. This risk-averse policy has significantly reduces the risk of default of the project owner.
InRento's first buy-to-let project in Poland is also relatively low-risk in terms of the loan-to-value ratio, which is just 53%. This means that the investment is secured by almost double value of the building", - says G. Germanavičius.
Don’t miss this investment opportunity in Poland! Information and documents about this project can be found here.