Do you want to earn money from renting a flat to students? There is not much time left, and there is a lot of work and formalities. You have to find an apartment, buy it, prepare it for rent, and then give it to the right tenant. The reward can be a profit at the level of 4 times higher than on an average bank deposit - according to Home Broker estimates.

Only the most careful students are already looking for new premises for the next academic year. This is the classic silence before the storm. Already in September hundreds of thousands of students will come to big cities looking for "four corners". If anyone wants to benefit from this seasonal revival, they have little time left. It is worthwhile to have at least a week or two before the beginning of the academic year.

Students prefer to rent together

Choosing the apartment itself is only seemingly simple. Students usually want good communication with the university and the city centre, decent conditions, the Internet and more and more often a dishwasher. More compromises can be made by choosing the building itself. It doesn't necessarily have to be a new building - students like to live in blocks of flats made of big plates - especially if the rent is attractive. They also appreciate offers with separate rooms. It is important to be aware that students often look for a roof over their heads together with their friends - they need their own corner and not passable rooms. If the investor wants to maximize the profitability of the lease, he should choose a place with separate rooms, which are located on a modest area.

The investor must not forget his own comfort either. If he does not use the offer of a rental management company, he will have to show the apartment to the willing ones and visit the tenants once in a while in order to write down the counters or just check if the apartment is well maintained.

You also have to prepare yourself for the competition. During the holiday season, not only investors are more active, but also parents, who can afford to buy a place for their future jacket instead of putting up a lease every month.

With a loan it will be more difficult

Investors who want to buy an apartment for cash are in the best situation. They will be able to buy a flat overnight, which is an important argument during price negotiations. In addition, a quick transaction gives a lot of time to find a renovation team and prepare a good offer.

Investors who use credit are at a disadvantage. Those who are looking for an apartment to buy should already start completing the necessary documents for the loan. Earnings certificates (each bank has its own specimen), archival PITs, tax and social security certificates are only some of the documents that may come in handy, and which cannot always be obtained at hand. The exact list depends on the type of property being purchased, the bank where the loan application is submitted and the form of employment of the investor. When there is little time, it is worth looking for an institution among banks that will help you start the whole process of preparation even before finding a suitable apartment. If the bank examines the creditworthiness beforehand, then only the property will be checked - advises Open Finance.

What is no less important, if we find a suitable property, the current owner must also prepare the appropriate documents. You can ask him to do so at the negotiation stage. And so, if a mortgage is secured on the property, it is necessary to obtain from the bank a document confirming the current state of debt and the account number to pay the loan in full. Besides, in each case you need a certificate that no one is registered in the property and that the property is not in debt due to settlements with a cooperative or community (if it is, you need to know the amount).

Residential formalities

In a hurry, one should not forget to take care of the security of the transaction. Therefore, it is necessary to check the legal title of the current owner to the apartment (it is worth to read the land and mortgage register and take a look at the legal basis of the purchase). If the current owner received the property inherited, he has to pay the amount due to the tax authorities. If the investor buys the apartment with the help of a loan, a preliminary agreement is necessary before signing the final agreement. It is safest to sign it in the presence of a notary public, when applying for entry in the land and mortgage register of the claim for transfer of ownership of the real estate. The preliminary agreement will be needed by the bank lending the transaction. Only when the bank is ready to pay out the loan can the final agreement be signed.

After that, the sooner the investor gets the keys to the apartment, the better, because the apartment has to be prepared for rent. There are still a lot of formalities: collecting the premises, visiting the cooperative or municipality, transferring the contract with the energy or gas supplier and taking care of the necessary internet for students. Refreshment and partial furnishing of the premises is a necessary minimum of renovation and finishing works. Then all that remains is to prepare an attractive rental offer and wait for potential tenants.

From a rental 4 times more than from a bank

Is it worth it? Taking into account that the average annual bank deposit currently bears interest at 1.28% (net of tax), the housing market seems very tempting. According to Home Broker's estimates, the average yield on renting a flat in a big city is as much as 5.28%, after deduction of costs. This is 4 times more than the result on a statistical annual deposit. If that were not enough, NBP data for the largest cities suggest an annual increase in prices of second-hand apartments by as much as 7%.

There is no profit without risk

Of course, it is not that buying an apartment for rent is a risk-free investment. After all, no one can guarantee that our apartment will be worthwhile in time, being occupied by tenants without interruptions, and they will take care of the apartment, pay the rent without delay, while the rate itself will only increase over time.

It is worth remembering this in the context of the implementation of the "Mieszkanie +" (Apartment +) programme, which, among other things, is to provide the market with thousands of flats with low rent, which tenants may become owners after years. In addition, there is a growing risk of competition from large institutional investors, who are increasingly willing to invest in the student rental market. Companies appreciate the profitability of this sector, so it is important to be aware that the growing competition may force higher service levels or lower rates.