Can you live off of rental property income?
Quite a lot of property owners consider renting apartments as a great way to earn passive income. Some even go that far to compare it with saving money in the bank. Instead of putting all your money in the bank and earn while saving, you can buy an apartment and make more money from it by renting it. However, offering an apartment for rent comes with responsibilities, and if you don't buy it at a perfect location, you might need to lower your rent to get tenants.
When renting apartments pays off
When it comes to renting apartments, Belgrade has a lot to offer. Renting can be a great source of income in the Serbian capital. However, it's essential to pay attention to the location and overall state of the apartment.
Some of the main factors that determine the rent are:
If your apartment is located in the city center or popular parts of Belgrade like Vracar and Novi Beograd, then you'll have a better chance of getting a better price. Monthly rent for a small apartment in Novi Beograd is 400e per month, while exclusive flats near St. Sava's Temple is 600e per month. Penthouses and larger apartments are always at least twice as expensive.
You can rent apartments to young couples, busy people who moved here for work and families. These type of tenants want to live in an attractive part of the city but also want to live near schools and kindergartens. Also, it's convenient to have supermarkets, shops, banks, and post offices in the neighborhood. The better the location, the more interesting the apartments, and the higher the rent. This is a winning combo.
- Fixtures and fittings
When it comes to renting an apartment in Belgrade, forget about passive income. You will have to invest in furniture, appliances, and small home repairs. If you are trying to rent an older and nonrenovated apartment, you will have a hard time finding suitable tenants and keeping a good price.
As an example, let's compare two 50m2 apartments in Vracar. One is fully furnished, has a washing machine, dishwasher, refrigerator, stove and microwave, vacuum cleaner, juicer, and other small kitchen appliances. Everything is new, modern and in excellent condition. The rent for this apartment is 450€ per month.
The second apartment, that's also located in the old building, has the same area of 50m2, but has outdated furniture and almost none home appliances costs 250€ per month. It also has a lot of old trinkets and closets full of old blankets and books. Rarely anyone wants to live in this type of apartment. People want to have enough storage space and to have enough room for their things.
Luxury apartments Belgrade
Users get quite anxious when they see real estate agencies advertising a property as a "lux apartment." Why? Because real estate agents and landlords quite often think that having a fresh coat of paint is considered a luxury, whereas the truth is that it's merely a necessity not to have outdated and torn furniture and messy walls. So, that's why here we never really use the term luxury apartment unless it has a luxurious interior.
If you have resources to get the newest appliances and hire an expert to help with you the interior, then you will have a better chance to ask for a higher rent. Luxury apartments have a jacuzzi, latest tech, big screens, parking spots, garages, and sleek and stylish interior.
Also, luxury apartments can't be really small. People who work in embassies or for big corporate companies want to have lots of space, especially when they are relocating for work with families. They often want to rent an apartment for a longer period, and then a monthly rent can reach the sum of 1000€ or more.
Earning a living by renting properties
To make a comfortable living by renting properties, you need to do some math and see if buying an apartment for rent will pay off in ten or twenty years.
If you plan to get a bank loan to buy an apartment for rent, then make sure that the monthly rent will cover the monthly mortgage rate, and then leave you some extra money too.
If you want to buy an old apartment, you must count in the renovation costs and the costs of new furniture. This calculation is quite simple. If you renovate the apartment, buy new furniture and change the installation, you will always have suitable tenants, and earn a nice monthly income.