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 studio apartments 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 fulfil 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 cancelling 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 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 commercialised 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.
|Borrower's equity exceeds the amount of financing needed||1 / B|
|Borrower's last year's net profit is sufficient to cover the fixed-interest||1 / B|
|Borrower's Debt / Equity ratio||2 / C|
|Borrower's ability to repay liabilities in the past||-1 / A+|
|Property price comparison to a 3rd party valuation||1 / B|
|Property type||0 / A|
|Is there a tenant already||0 / A|
|Borrower's experience with rental properties||0 / A|
|Property occupany over the last 2 years (if it was rented)||2 / C|
|Will the property require renovation||0 / A|
|Micro-location||1 / B|
|Years since last renovation of the building||0 / A|
|Does the property have elevator if it's not ground floor?||1 / B|
|Does the property have dedicated parking slot near premises? (long-term rent)||0 / A|
|Does the property have security? (for commercial)||0 / A|
|Property has been for sale for less than 1 year?||0 / A|
|Property has all applicable certificates/zoning rights with at least 2 years before expiry date||0 / A|
|Total:||8 / B|
*InRento Risk rating is of an informative nature only and can not be considered investment advice. InRento is licenced and regulated by the Bank of Lithuania.
April 08, 2021
We would like to inform you, that the mortgage on the Studio Apartments assets has been successfully placed (document is attached in the documents section) by the project owner and that the investment will distribute interest for the previous month on April 15th. The interest for investments carried out in the month of April, will be distributed in May, until the 15th day.
If you have any questions, do not hesitate to contact us at firstname.lastname@example.org or call us at +37069347427.