How to Choose a High-Yield Property Complex: Key Factors to Consider
Choosing a high-yield property complex is an important decision that requires thorough evaluation. Promises of guaranteed high returns should always be carefully checked, as the result can depend on many factors. Let's take a closer look at the key aspects to consider for making the right choice.
Location is crucial. One of the main criteria that influences the attractiveness of a condominium is its location. This factor determines the demand among tourists and long-term tenants. The condominium should be in an easily accessible area, ideally close to the sea and within walking distance of developed infrastructure such as shops, cafes, restaurants, and entertainment venues. This not only attracts tourists but also ensures convenience for long-term residents. Developers usually conduct a thorough location analysis at the site selection stage to ensure the complex offers the best conditions for future residents and maximizes profitability for investors.
A single management company. Higher returns can often be expected from condominiums managed by a single management company (MC). This eliminates competition between multiple MCs, which can lead to rental price dumping. In such projects, rental policies are more centralized and well-planned, helping to maintain stable high rates. Additionally, condominiums with a single MC usually have better-organized services for tourists, reflected in high ratings and reviews. If you are planning to buy an apartment in a project under construction, be sure to ask the developer how rental management will be organized in the future. Some developers work with their own management companies, or they select one through a tender among large networks. If the developer allows investors to choose any MC, this may lead to lower profitability due to multiple companies managing the property with different approaches.
MC specialization in tourism. Management companies specializing in short-term tourist rentals can bring higher returns. They are focused on a constant flow of tourists and aim to rent out properties for short periods, which generates more profit. The more frequently new guests move in and the shorter the rental periods, the higher the return for the owner. Long-term rentals, on the other hand, tend to lower rates and profitability. Therefore, when choosing an MC, it is important to consider its specialization.
Apartment price and its impact on profitability. The price of the property is another important aspect that influences the final return. At the early stages of construction, the price per square meter is significantly lower than in the later stages, so purchasing at the start of sales offers the advantage of a lower price. Over time, property prices and rental rates increase, which also boosts potential profitability. The earlier the property is purchased, the greater the potential income, especially if rental rates rise over time.
Some developers offer additional financial tools to increase profitability. For example, when purchasing an apartment without a payment plan at the foundation stage, the buyer is effectively investing in the construction and can receive returns even during the building phase. Schemes such as pay back allow you to earn up to 5% annually on the invested capital before the property is even rented out. This provides the opportunity not only to purchase the property at a lower price at the start of sales but also to begin earning returns long before the rental income starts.