This post was automatically translated into English
If you buy an apartment in Vilnius and immediately rent it out, the investment would pay off in 14–20 years on average, but for those who choose real estate as an investment vehicle, in addition to the investment return, the security of the investment and the expected change in the value of the property are no less important.
If you buy an apartment in Vilnius and rent it out immediately, the investment would pay off in 14–20 years on average, but for those who choose real estate as an investment vehicle, in addition to the investment return, the security of the investment and the expected change in the value of the property are no less important..
According to Martynas Žibūda, Development Director of the Eika Group of Companies, the most popular investment options are 1- and 2-room apartments. “Families of three or more make up a very small share of the tenant market, so investors usually choose more compact housing. For example, the most popular size for those planning to purchase and rent out a 2-room apartment is 44–48 sq. meters. Also, apartments on the lower floors of the building are most often chosen for investment, since their price is lower, and the rental income almost does not depend on which floor the apartment is on,” says M. Žibūda.
According to the data of the company “Eika”, economy class apartments would pay off most quickly in the capital, and prestige class apartments would pay off the slowest. In the Pilaitė district of the capital, a newly furnished economy class two-room apartment with an area of about 50 sq. m. currently costs about 75-85 thousand euros, and its rent is 380-420 euros per month. Thus, having purchased and rented out such housing, the owner could recover the entire amount of the apartment in a little more than 14 years, without taking into account housing depreciation and personal income tax or business license tax.
Over a slightly longer period, the investment would also return to those investing in the middle class. For example, a middle-class newly built two-room (50 sq m) apartment with full finishing in Naujamiestis today costs about 95-105 thousand euros, and the rent is about 440-480 euros per month. The tenant would pay the owner of such an apartment the full amount after a little more than 17 years.
“The payback period for investments in a prestigious class apartment is the longest – up to 20 years or even longer, depending on the level of equipment, but the potential for growth in the value of luxury housing is the highest, and the impact of negative market changes on the value is the lowest, compared to other classes. Investors who purchase prestigious class apartments often rent them out for a long time to various companies and embassies. Usually these are apartments in the Old Town, Užupis, Žvėryn,” – M. Žibūda comments on the market situation.
According to Eika, currently a new prestigious class two-room, 50 sq. m apartment in the Old Town can be purchased for 115-130 thousand euros. Its furnishing would cost another 20 thousand euros, and it would be possible to rent it for 600-650 euros per month. The payback period for such an apartment would last about 20 years.
About the Eika group of companies
Founded in 1992, EIKA is one of the largest real estate development and construction groups in Lithuania, successfully developing residential, commercial, public and other building projects, creating a new quality of life and work. The company has already built more than 3,000 apartments and 270 thousand square meters of buildings. Eika has been awarded many times as the best real estate developer in Lithuania, and the company’s projects “Santariškių namai” and “Eikos namai Pilaitė” have also become the best in Lithuania.
More information:
Vitalija Roče
Marketing and Communications Manager
Phone: +370 698 56273
Email: [email protected]