InRento team is introducing a new buy to let investment opportunity - S12, Vilnius. The investment case consists of modern office space located in the near center of Vilnius, Sporto str. 12.
In 2021, the premises were divided and renovated. The final installation of the premises is currently being completed. These premises will be rented as separate offices, thus ensuring the needs of tenants and achieving a higher return on rent to investors.
During the financing of the project, the project owner will additionally invest in the installation of the premises, thus increasing their value. The premises consist of two cabinets and a bathroom.
As the premises currently don’t have tenants, the project owner undertakes to pay investors 7% annual interest until the premises are leased. The project owner also ensures a minimum annual net rental yield of at least 6.5% to the investors.
Reasons to invest in the S12 project in Vilnius:
Capital growth change:
The prices of these types of premises in this district of Vilnius increased +83,6% in the last five years.
The terms of the new rent agreement are currently being negotiated. The project owner ensures a minimum annual net rental yield of at least 6.5% to the investors.
Financial terms of the investment:
InRento investors are granting a loan to the borrower. 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 project owner and the investors is set at 85/15, meaning that the borrower is obliged to distribute 85% of the income to the investors.
The capital growth distribution:
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 July 10th and August 10th day even if the project would not be fully funded.
The project owner (borrower):
UAB ‘’Nebas’’ is a growing and profitable personal investments company. The company manager - Nerijus Baliūnas - has more than 8 years of management experience, has launched and sold his company, and has been active in investment activities for over 7 years. N. Baliūnas works in the ‘’Business Angels Fund II’’, which owns up to 3% of the holding company of UAB ‘’InRento’’.
When is it possible to "exit the project’’?
When the project is fully funded you will be able to sell your investment on the secondary market. The fee for the secondary market transactions is 2% of the principal value, which is being charged to the seller.
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 2% annual interest rate for the first 3 months of vacancy. If the borrower would not rent out the assets within 3 months, the fixed-interest rate would be increased to 7% per annum.
What will happen when the property will be sold?
When the property will be sold and it should be sold more expensive than it was acquired the capital growth will be distributed in the following structure: 45% investors / 45% borrower / 10% InRento. The project owner assumes potential loss if the property is sold at a lower price.
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: The property may lose tenants and it may take time to find new tenants.
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 as 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||0 / A|
|Borrower's ability to repay liabilities in the past||-1 / A+|
|Property price comparison to a 3rd party valuation||1 / B|
|Property type||1 / B|
|Is there a tenant already||2 / C|
|Borrower's experience with rental properties||1 / B|
|Property occupany over the last 2 years (if it was rented)||2 / C|
|Will the property require renovation||2 / C|
|Micro-location||0 / A|
|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|
|Borrower's Debt / Equity ratio||0 / A|
|Years since last renovation of the premises||-1 / 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.