"Take a seat and calculate your expenses"
In the heart of Minsk, the capital city of Belarus, the rental market is a subject of ongoing debate. With property prices soaring and rental costs remaining relatively high, the question of whether landlords are making a profitable investment has become a topic of discussion on various platforms, including social media.
A woman, a resident of Minsk, recently bought a three-bedroom apartment for approximately $60,000 and invested about $30,000 into its renovation. Facing the decision of whether to sell or rent her property, she is considering renting it out for $450 at the current exchange rate. However, a TikTok user has suggested that the rent for a $100,000 apartment should be around $800-$900 to be profitable.
The high property prices in Minsk, with the average price per square meter for residential property being around $1,960 for typical properties, pose a significant challenge for landlords seeking to purchase suitable properties for rental, especially in the more desirable central or new development areas. Rental prices for furnished accommodation of about 85 m² in a normal area are around 1,234 BYN per month, roughly translating to the local market's rental rates.
Despite these high costs, Minsk continues to attract economic activity, infrastructure development, and foreign and domestic investment, which sustains demand for rental housing and supports property value appreciation. This economic environment strengthens the potential for long-term capital gains on property investments.
However, without explicit rental yield figures, it's advisable for landlords and investors to carefully analyze local rental demand, vacancy rates, and operating costs to estimate their return on investment (ROI) accurately. The woman, for instance, estimates it would take about 18 years to recoup her investment by renting out her three-bedroom apartment.
Not everyone shares this view, as some commenters support the woman's position, citing examples of their own affordable rentals. On the other hand, some landlords in Minsk are asking for a month's salary for a 30 sq.m. apartment, which is seen as excessive by many.
The rental market in Minsk, like any other, is not without its challenges. Unreasonable behavior from both tenants and landlords is a problem that needs to be addressed to ensure a fair and sustainable market for all parties involved. As the woman puts it, she bought her apartment to avoid paying for rental housing and took a risk, hoping to recover her investment over time.
In textbooks, renting an apartment is considered unprofitable if the cost of the property is higher than the sum received from rent over 10 years. If the market value of an apartment remains the same, it can be sold for $100,000 after being rented out for 5, 7, or 10 years. Yet, the money spent on repairs for an apartment can be recovered in as little as 6 years, according to some estimates.
One commenter shared a heartening story about their daughter who rents an apartment in Minsk for $350, despite it being expensive for them. They emphasized that cleanliness and respect for the property are essential factors in a successful tenant-landlord relationship.
In conclusion, the cost of rental housing in Minsk is relatively high compared to regional Belarus but is matched by solid investment demand and potential for returns through rent and property appreciation. Landlords investing at current price points likely expect moderate rental income complemented by capital growth over time. However, careful consideration of local market dynamics is crucial for landlords to make informed investment decisions and secure a reasonable return on investment.
- Given the ongoing debate in Minsk's rental market with high property prices and rental costs, a woman's decision to rent out her renovated three-bedroom apartment for $450 per month can be seen as an investment in real-estate, potentially generating monthly finance income.
- When considering the potential for profit in Minsk's rental market, a TikTok user suggested that the rent for a $100,000 apartment should be around $800-$900, suggesting a possible correlation between property value and rental price, thereby making it a key factor for investors when deciding on investing in real-estate.
