27.11.2015

Rental business in Moscow - pros and cons

Is it possible today to invest money in such a way as to receive a decent profit without unnecessary problems and freely dispose of own time? Investing in real estate, especially commercial real estate, has become the rational answer to this question for thousands of entrepreneurs. always "lives an active life", regardless of the financial situation in the country.

According to CEO consulting company RENTAVED ESTATE Ruslana Dry , e Another significant advantage of this type of investment is the ability to enter the market with a relatively modest amount: many investors start by buying a small property for rent and build up their assets gradually.

prospects rental business

As in any other activity, the commercial space rental market has its own laws and subtleties that must be taken into account when weighing all pros and cons of a rental business. Everything, perhaps, is not as simple as described in the rainbow articles of realtors, but with a balanced approach, it is more than realistic.

In general, the picture looks like this. You purchase a commercial premises or an apartment with its subsequent transfer to non-residential premises, find a tenant and receive a regular fee from him for the use of your property. With the advantageous conclusion of a long-term lease, your worries are limited to control over the flow of funds.

The benefits are obvious:

the possibility of obtaining a stable passive income without a particularly large start-up capital;

minimum labor investment;

with proper planning, the risk of losing money is reduced to almost zero;

ever-increasing demand for property for rent;

almost 100% liquidity.

Difficulties you may face in the rental business

As elsewhere, there are some "pitfalls" here. In essence, all the difficulties come down to one question: the approach to choosing a suitable object should be as competent as possible. After all, there is only one threat to the rental business - it is downtime of space in the absence of tenants. That is why, from the very beginning, every detail must be taken into account: cost, location, condition of the object, the situation on the market, the patency of the place, etc.

Sometimes an investor gets a chance to buy a ready-made and profitable rental business that already has permanent tenants, and sometimes it makes more sense to consider a “raw” option that requires renovation or redevelopment. When looking for real estate, you will come across a pattern: when buying a cheap property, you will have to invest more in its arrangement, and vice versa.

But the possibilities here are enormous. As the practice of Renaissance Investments shows, a semi-basement premise that is inconspicuous at first glance, the prospects of which inexperienced investors could not discern, can, with a competent approach, become a real gold mine.

And then what?

Good liquidity is another significant plus in favor of investing in real estate. If you urgently need funds, it is profitable to sell rental business in Moscow won't be difficult.

First, real estate prices in the capital have a steady upward trend.

Secondly, well-established systems with existing tenants disperse on the market instantly. Investors appreciate the opportunity to make quick profits without downtime at the start and are willing to pay for it - often much more than the amount you invested.

However, a well-organized rental business is so unpretentious in terms of “labor costs” that many entrepreneurs decide to keep it for themselves, even when they go abroad or change their occupation.

If you are just taking your first steps in the world of real estate, it would be a smart move to enlist the help of investment professionals. . Just don't make a common mistake and don't contact ordinary realtors: after all, you are not buying an apartment for your family, you are acquiring a business.

Your goal is to find a trusted consulting agency that specializes specifically in the rental business. Such organizations have their own database of profitable offers, are well aware of the intricacies of the industry, carefully calculate the profitability of your investments and protect you from obviously losing options.

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Many entrepreneurs interested in a good regular income stream are increasingly turning their attention to the rental business.

All over the world, this type of activity is enviably popular due to the huge benefits that real estate can bring.

This business is very large-scale, and therefore it requires considerable financial funds. However, medium and small businessmen are also actively showing interest in it.

Therefore, we will consider how you can start a rental business from scratch and succeed significantly in it.

How to start a rental business

Those wishing to engage in business in the field of real estate rental should first of all take into account what features and nuances are characteristic of it.

This type of entrepreneurship is able to bring the greatest success in large, as well as in tourist cities, there are always a lot of people who need rental housing.

Another category of people who can become your potential clients are the owners of various companies and enterprises, both medium and small segments. They also need premises to conduct their activities.

One of critical steps in this case, it is the purchase of suitable real estate for subsequent rental.

At this stage, many entrepreneurs think about where it is better to buy real estate - in their own country or abroad. Experts in this regard recommend that novice entrepreneurs buy real estate in Russia, it can be very profitable due to its relatively low cost.

As for foreign real estate, firstly, it is quite an expensive pleasure, and secondly, doing business itself has many nuances and difficulties.

This approach will allow you to deal with any situations that arise much easier and faster.

In addition, at first, a novice businessman will certainly need qualified advice from experienced investment specialists.

It is they who will help with maximum accuracy to calculate all operating costs, profitability and profitability of this business, as well as calculate the cost through the capitalization rate. With the help of such specialists, you will be able to plan your business in the best way.

What to consider when purchasing a ready-made business

You can go the other way and purchase a ready-made business from the owner along with the tenants.

Of course, the implementation of this idea requires more significant investments.

However, in this way you will receive many important advantages, including time savings, as well as the absence of the need to search for potential tenants and carry out repairs on the premises.

When choosing this option, keep in mind that at the time of the purchase, the operating enterprise must be characterized by high profitability and profitability.

An important role is played by the assessment of competition located nearby, so do not lose sight of this moment.

Before purchasing a ready-made rental business, carefully read the documentation - this will help prevent various undesirable consequences.

The acquisition of a ready-made business has a number of its undeniable advantages. However, there are some nuances that can bring certain problems.

The fact is that inexperience and incompetence of rentier newcomers are willingly used by seasoned scammers who have developed many schemes for deception.

Therefore, it is advisable to consider in detail here those of them that occur most often.

The most common scams include:

• provision of false documents for the sale of a property;
• false calculation of the economic model of payback, absolutely untrue;
• an indication in the text of the contract of an inflated rental price.

So that instead of buying a profitable and profitable business do not become a victim of scammers, exercise maximum vigilance and caution.

False documentation leads the list of deceptive schemes and tricks.

In the old days, scammers, as a rule, were engaged in forging documents. legal entities, but now private investors are increasingly suffering from their misconduct.

In addition, scammers often indicate a rental rate that is much higher than the actual one. As a result, the payback period will significantly exceed the one that was originally planned.

Therefore, those wishing to acquire a ready-made rental business must treat the transaction with maximum responsibility and care.

Existing varieties

In the old days, for many years, entrepreneurial businessmen in Russia made huge profits from tenement houses that existed before the revolution.

Today, this type of business is no less profitable, but it is now presented in a new guise - in the form of private hotels and hostels, large business and shopping centers, and much more.

If you are seriously interested in the rental business, it will be useful for you to know that it can be connected not only with real estate objects.

Currently, there are many types of this business, among which there are certainly options that may interest you.

to the most popular and profitable ideas rent should be:

• residential premises;
• commercial and industrial premises;
• Vehicle;
• special equipment;
• various types of equipment;
• dry closets, etc.

As you can see, the choice is quite large. Therefore, choose the most suitable direction for you and get high profits.

Advantages and Features

For those who are interested in the rental business, it is important to know what are the pros and cons of it.

• From an economic point of view, this type of business is very effective - full payback can occur in seven years, and even faster in the face of rising market prices.
• The rental business is characterized by high reliability and stability.
• This business has excellent liquidity, thanks to which it is possible to profitably sell objects and return all the funds that were invested.
• Residential real estate of the middle class brings less profit than the elite, but in this case, higher economic security is guaranteed.

The rental business is very profitable, reliable and convenient. Therefore, plan it wisely and get ready for big profit streams!

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Investing in commercial real estate will be profitable if a number of conditions are met. Among them is the choice of reliable tenants, a good location and a legally correct contract.

How to open a rental business: choose a direction and look for a room

To find a suitable space, first decide who will be your tenant:

• The shops
• Companies that need an office
• Organizations looking for a place to store products

Option #1: street retail

Street retail is retail premises located on the first floors of buildings. They have a separate entrance and their own showcases. Usually, for these purposes, several apartments are bought out and combined. When choosing such a room, experts recommend paying attention to the following points:

• Location on the right side of the main traffic
• Ground floor or basement
• There should not be other empty areas nearby
• Possibility of redevelopment

This is a sought after option for commercial real estate. Most often, it is rented by small shops or private companies operating in the service sector.

If you choose the right place and assign an adequate price, finding tenants is quite easy. It is very important not to make a mistake here if you plan to conclude a contract for a long time.

Option number 2: premises for an office or shop

If you do not own an apartment, pay attention to office and retail premises located in business and shopping malls. You can buy a share from the owner and rent out a small room for rent. Demand for rental property in the city center or near the metro is usually high.

However, keep in mind that there are some difficulties here:

• It is your responsibility to regulate the relationship between the tenant and the owner of the center
• All changes and restrictions that may be made to the charter of the center may affect the value of the share
• You will need to agree with the owner of the center the possibility of parking cars

Option number 3: storage space

Providing storage space to small companies and businesses is a good income option. When choosing a room, pay attention that it has a convenient entrance, communications are connected and ventilation systems are installed. For some types of goods, air conditioners will also be needed to maintain a certain temperature.

Remember that leasing a warehouse is a commercial activity that requires registration of an individual entrepreneur. You can choose a simplified taxation system. As for the code OKVED, suitable 70.20.2- Renting out your own non-residential real estate.

There are 4 types of warehouses, which differ in the size of the area and the conditions for storing goods:

• Class A. Premises with smooth concrete floors with anti-dust coating. Ceilings cannot be lower than 13 meters. Complies with European standards: installation required modern systems fire fighting and burglary protection.
• Class B. Useful area is 1'000-5'000 m².
• Class C. These are capital buildings or insulated hangars. The floor can be asphalt, concrete or tile. Ceilings - not less than 3.5 meters.
• Class D. "Cold" hangar with a basement, a basement on ground floor in a residential building, utility rooms and garages.

Choose the option that suits you in terms of investment size and is in demand in the selected area of ​​the city or region.

How to manage relationships with tenants

The lease agreement indicates the location of the property: address, area, business registration data, lease term, rental rate and payment method.

According to the current Russian legislation You can increase the rent no more than once a year. The maximum level of the rate increase and the time for which you will warn the tenant about this must be specified in the contract.

The amount of the rental fee can be indicated in rubles, dollars or euros. However, the calculation is made only in rubles. If rents pegged to a foreign currency, the contract must indicate that payment is made in rubles at the rate of the Central Bank on the day of payment.

Important point: if the tenant repairs the premises handed over to him, he is recognized as a “necessary improvement”.

This means that if such changes are not prohibited by the contract, then the tenant can demand reimbursement of expenses or their inclusion in the rent, regardless of the consent of the owner of the premises.

Carefully work out the contract, it is best to involve a professional lawyer. Specify the obligations of the tenant and penalties for their violation. For example, if the tenant delays payment or damages your property.

If a real estate lease agreement is concluded for more than 364 days, it must be registered with the territorial division of the FRS (Rosregistration). When signing a contract for an indefinite period, state registration is not required.

According to the law, the period for registering a contract is no more than 30 days if you have provided a complete package of documents.

After signing the acceptance certificate between the owner of the premises and the tenant, the premises are considered leased. Be sure to indicate in detail the condition of the property in this document in order to avoid disputes in case of property damage. Together with the premises, a technical passport is transferred to the facility.

Advantages and disadvantages of the rental business

This is the only type of business where we can talk about passive income. The main advantage of such a business is that by choosing suitable tenants and signing long-term contracts, you can make a profit without any active actions.

At the same time, it is necessary to understand that income will depend on the successful activities of tenants. You will need to supervise their work and ensure that the premises are kept in good condition.

The average payback time for investments is 7 years, provided that you can quickly find reliable tenants.

The main thing here is to specify in advance all the nuances of the activity and prescribe the conditions for the transfer of assets in the contract of sale. This will reduce the risks.

We have catalogs where you can find current offers in your city:

• Rental business offers in Moscow
• Options for existing facilities for St. Petersburg
• Ready rental business

The rental business has been and remains popular for many years, as many people are unable to purchase a home, and companies seek to reduce the level of one-time investment in development activities. The range of objects that can be rented out is constantly growing: at the moment, you can even rent out things such as roller skates, skis, etc. - everything that is not in constant demand, but is an object of seasonal use.

However, the most common option is still to rent a property. In order to receive a certain income from the provision of a particular room for rent, it is necessary to take into account a number of nuances that will be discussed in this article.

It must be understood that real estate is usually classified into 3 groups − land, housing and non-residential premises. The most common types of services in this market are the provision of rental housing and non-residential premises.

Among the non-residential, commercial real estate is usually rented. At the same time, all authoritative analytical agencies distinguish the following varieties of it:

• office rooms;
• trading;
• warehouse;
• industrial.

In addition, some organizations rent separate view premises - the category "for special purposes". Buildings are allocated here for kindergartens, schools, hospitals, churches, etc.

In addition to real estate, you can rent out land, gazebos, equipment, cars, special equipment, inventory and much more. However, this is a rarer and more complex form of business.

What is the most beneficial?

If we talk about residential real estate, the average cost of a one-room apartment 10-15 minutes from the metro in a residential area in Moscow will cost 5-6.5 million rubles. At the same time, the average rental rate for such rooms is about 25-30 thousand rubles. As a result, when calculating, it can be obtained that the minimum payback period for a one-room apartment will be about 15 years.

Accordingly, this option cannot be called very profitable in terms of investment: the only case in which it can really pay off is when housing is inherited.

If we talk about office premises, they are somewhat more expensive than residential ones, since their location should be in more passable places, and their area is higher. In Moscow, a small office space will cost 6.5-7.5 million rubles, provided that the area is about 60-70 square meters. In this case, the rental rate in this case will be considered for 1 square meter.

According to the Knight Frank agency, at the end of 2015 the rental rate for class A offices was about 25 thousand rubles, and for class B office space - about 15 thousand rubles a year. Accordingly, the maximum payback period will be about 8 years old.

It is even more profitable to rent retail premises than office premises - their payback period is 5-6 years. But there is an important limitation here: for such real estate, one of the key factors is the location. The premises should be located in the central area, in a place with a high level of traffic. Finally, it must be of high quality.

In general, commercial real estate loses to residential in only one parameter: the level of risk, since it is dependent on economic situation in the country and in a particular city.

For information on where to start and how to develop such an activity, see the following video:

How to organize such a business from scratch?

1. First of all, you need to find a suitable place for renting. In the case of receiving living space as an inheritance, the procedure will begin with the execution of documents confirming that the entrepreneur is the owner of the housing.
2. In a search situation finished premises it is best to turn to the services of professional agencies that will help you assess the real value of housing or commercial real estate: an inexperienced businessman can easily miscalculate.
3. Next, you need to complete the necessary documentation for the property. If this is commercial real estate and it is planned to lease it to special organizations (for example, those working in the field of Catering), you need to take care of obtaining additional permits and conclusions of some services.
4. After clearance primary documentation it is necessary to carry out redevelopment and repair: in the case of residential real estate, it is important to purchase a certain set of furniture and household appliances, since apartments that can be lived in immediately after settlement can be offered at a higher cost. In the case of commercial real estate, it is important to focus on increasing free space and the possibility of subsequent redevelopment according to the needs of the client.

IN Russian practice many people rent residential real estate without concluding a contract - this allows you to get rid of the personal income tax in the amount of 13% and reduce the payback period. However, this comes with certain risks - in particular, those associated with the unreliability of customers. Therefore, both in the case of non-residential and in the case of residential real estate, it is necessary to formalize the relationship with the tenant.

Where to look for clients?

Finding customers through standard advertising options (posting ads in crowded places or print media) is not effective within the rental business. Advertising can be done through social media(this is especially true for the situation of renting residential real estate) - here the effect of "word of mouth" will work.

In addition, placement on thematic sites and forums is suitable. For commercial premises, especially those located in shopping centers, it is possible to put up a "for rent" ad with the owner's phone number. This will expand the circle of potential customers to all visitors to the shopping center.

Finally, there are 2 more effective ways to find customers - maintaining a thematic site or blog with unobtrusive advertising of services as a landlord, as well as distributing brochures and business cards.

Necessary costs

If an entrepreneur is going to engage in such a business, he must understand that among the main cost items it is necessary to include remodeling costs: in this case, customers are ready to conclude lease agreements at much higher rates (the difference can be up to one and a half times). This is because after redevelopment, the percentage of usable area most often grows, in addition, the room can be changed to fit your own needs.

Among the costs, it is also necessary to highlight:

• The cost of building or acquiring premises.
• The cost of the services of a specialist who can assess the market price of real estate.
• Expenses for the maintenance and security of the premises.
• Costs for electricity, water supply, etc.

Underwater rocks

One of the pitfalls is to determine the optimal investment of money. Often, inexperienced entrepreneurs incorrectly assess the value of a particular premises, thereby investing in illiquid objects, losing a large amount of money.

In addition, it is important to pay attention to the legality of the business, changes in legislation and the process of paperwork (primarily for commercial real estate).

Please note that the tax legislation in the field of rental business is constantly changing.

When calculating costs and the payback level, it is necessary to determine several development options - optimistic, most realistic and pessimistic in order to determine the approximate payback period of the object, as well as the fact how to diversify risks. It is imperative to have other sources of income in order to insure yourself against a situation of lack of money.

Pros and cons of this area

Such a business, like others, has a number of advantages and disadvantages that follow from its features. Among the minuses, one can single out the main one - the search for a tenant can take many months (this primarily concerns industrial facilities and commercial real estate in impassable places). As a result, even a high rental price will not be able to compensate for the financial costs that the lessor will have to bear during the entire period of downtime.

Also among the shortcomings should be highlighted:

• sufficiently long payback period;
• not very high level of profitability;
• high start-up costs.

In this situation, the only rational way out is the acquisition of liquid property (one for which there is always a certain level of demand). To do this, it is important to be well versed in this area or to contact the services of a specialist.

Business benefits include:

• long-term contracts for a period of one year or more;
• stable level of profit;
• income will be received by the landlord constantly;
• passive nature of making a profit (the landlord does not need to expend any effort after signing an agreement with the tenant);
• the possibility of organizing a business without registering as a legal entity.

Thus, the rental business is quite an attractive area for earning money. However, it is best to combine it with other sources of income in order to insure yourself against possible risks.

Nowadays, there are innumerable options for opening a commercial enterprise. One of the easiest is to rent a business. The positive and negative aspects of such activities will be discussed in more detail below.

Why is the business arena profitable?

Opening a profitable business is usually accompanied by large financial costs for its owner. Let's take a look at some of the main reasons why many aspiring entrepreneurs do not have the actual opportunity to start and grow their business.

Lack of funds

Opening his own business from scratch, unlike renting, a businessman is faced with the problem of finding funds for:

• Building or renting premises;
• State registration and obtaining the necessary documents;
• Payments for public services, taxes and additional costs
• Advertising and marketing;
• Procurement of raw materials and related equipment;
• Hiring and remuneration of employees of the enterprise;
• Other expenses.

Lack of experience

Certainly experienced businessmen have an idea of ​​how to open a business. They have sufficient knowledge in managing the company, maintaining its functioning and bringing the enterprise to full payback in the shortest possible time.

A person who intends to start his own economic activity from scratch runs the risk of wasting time and finances for nothing, as he does not have enough experience in maintaining commercial activities. Renting a business provides an opportunity to avoid all this by getting finished model production with well-established ways of solving such problems.

Competition

The presence of serious competitors is often the reason why new firms lose income - and as a result, go bankrupt. The rental business does not have this problem, as it often has an established clientele with a stable income, already occupying a certain niche in the market.

Leasing a business is divided into two types:

• Partial lease - only the fixed assets of the enterprise;
• Full lease - includes all the property of the owner.

Legal nuances of the conclusion of the contract:

1. The property is transferred from the lessor to the lessee in the amount, in the manner and under the conditions specified in the contract;
2. The contract is drawn up in writing signed by both parties to the transaction;
3. The document is subject to mandatory state registration. It enters into force only from the moment of such registration;
4. Failure to comply with the form of the contract entails its invalidity;
5. The responsibility of the parties for violation of the terms of the contract is determined by the document itself and the current legislation;
6. It is not recommended to compile this rather complicated document on your own. It is better to contact a qualified specialist.

Leasing a ready-made business for rent: the pros and cons

This procedure is often confused with. Franchising is a more legal form of doing business and involves the transfer of rights to use a licensed product, brand or business on behalf of the owner. Ready-made business for rent, it is more correct to call everything only temporary use.

Renting a ready-made business is much easier and less expensive. The tenant receives ready-made enterprise with premises, employees to all necessary equipment. It remains only to properly organize the leadership.

Like any type of activity, business rent has its advantages and disadvantages. Before you get down to business, it is important to determine all the pros and cons:

Let's start with the pros:

• The most important point that makes you think about making such a decision is the absence of the need to attract significant investments. Money to keep ready business it takes much less than opening from scratch. In turn, the landlord, deciding to lease the business, receives profit from the activities of the tenant.
• With an undesirable outcome, it is possible to end the activity. In this case, the tenant will lose only the funds that go to pay the rent, in contrast to investing in an independent project;
• The tenant receives irreplaceable experience in management commercial enterprise. It can be used in the future to create own business. Reduces the risk of burnout, losing all finances.
• The owner himself deals with inspection bodies, as he is the owner of the company, which simplifies the work of the tenant;
• A businessman who decides to take up management receives not only a business without renting a room, but also equipment, a formed staff and a client base with a firm reputation.

Now let's weigh the cons when renting a ready-made business for rent:

• Business will always remain a stranger, no matter how successful it may be. If the tenant achieves good profitability, there may be a risk that the owner chooses not to renew the contract. The lessor can start independently, without intermediaries, to manage the enterprise, receiving more income;
• There is a high risk of becoming a victim of scammers. When concluding a deal, you need to pay attention not only to the inscription: “I will rent a business”. It is important to verify the authenticity of the documents confirming the ownership of the company;
• Compensation for damage. A situation may arise in which the tenant will have to reimburse the cost of restoring the property. To avoid this problem, one should take into account technical condition premises with equipment and indicate this in the contract;
• It is not always possible to make changes to the work plan of the enterprise, establish new partnerships, carry out construction or repairs on the territory of the company to improve its work. The owner has the right to simply refuse the tenant.
• Not all specialists received may meet the requirements. Some employees will have to be replaced as soon as the business is leased.

• Before concluding a transaction, it is desirable to analyze the enterprise, property and offered services (goods). A good solution would be to draw up a business plan based on the available information;
• It is important to consult experienced lawyers in this matter;
• When choosing a company for rent, it is better to build on your own knowledge in its field of activity;
• Assess the demand for the selected business;
• Consider current and potential profits with the possibility of attracting new investments;
• Foresee possible risks and degree of control over this business.

Popular rental business ideas

The most popular ideas for organizing this kind of activity are small and medium-sized enterprises. Renting a ready-made business, which is in the greatest demand, mainly refers to the field of real estate, the provision of services or catering establishments. Among them, the most common are:

• Beauty salons, massage complexes, hairdressing salons;
• Companies selling pharmaceuticals and medical services(pharmacies, private dental clinics, research and analysis laboratories);
• Auto repair shops;
• Restaurants, cafes and eateries;
• Real estate rental business: office space, sports facilities, residential areas and industrial buildings.

Summing up

Starting your own commercial activity is a long and complicated process, which does not always lead to a mandatory profit. There are many specific risk factors that a businessman faces when starting a business from scratch.

To avoid unnecessary financial costs, it is better to draw up a lease agreement for the enterprise. This will allow you to take the first steps in realizing your claims for income, gain vast experience in managing a company and occupy a certain niche in the market.