Tourists are drawn to places of worship
The summer tourist season is in full swing in Moscow. Crowds of relaxed tourists roam all the iconic places, wanting to fully experience the unique atmosphere of the metropolis. Many of them prefer to rent apartments for several days instead of expensive and overcrowded hotels. Where in the capital are the most profitable areas for daily rent?
“In Moscow, short-term rentals of apartments and flats in new buildings are approximately 20% higher than in old housing stock,” said Regions Development Commercial Director Liliya Artsybasheva, who, together with the company’s analysts, conducted a study of the short-term rental market for flats and flats near 10 top tourist attractions in Moscow.
This list includes “Moscow City” (Panorama 360), the Kremlin in Izmailovo, Ostankino TV Tower, VDNKh (Fountain of Friendship of Peoples, statue “Worker and Collective Farm Woman”), “House of Music”, Museum Reserve “Kolomenskoye”, Main Building of Moscow State University and observation deck on Sparrow Hills, Moscow Kremlin (St. Basil's Cathedral, Red Square, Lenin Mausoleum, GUM), Bolshoi Theater, Dream Island amusement park.
According to the results of a study of the supply of short-term rentals within a 20-minute walk from these attractions, the highest profitability of daily rentals in Moscow was located next to the “Island of Dreams”, where the average cost of a daily rental is 5.6 thousand rubles.
Analysts assumed that the average occupancy of an apartment is 22.2 days per month. The profitability indicator is calculated based on the specific (in terms of per square meter) cost of real estate and the specific rental rate, therefore it is relevant for premises of different sizes (up to 50 sq. m). So, for new buildings on the Nagatinsky Peninsula near the amusement park, the cost is 1 sq.m. amounted to 487 thousand rubles. Average monthly expenses for one day are 1.7 thousand rubles. These expenses include cleaning and maintenance of the apartment, advertising costs. It is assumed that every weekend the apartment is rented for two days in a row, which reduces average monthly expenses. The calculation also took into account the income tax of an individual entrepreneur (6%). In addition, the study showed that short-term rentals of apartments and apartments in new buildings are approximately 20% higher than in old housing stock. Therefore, 20% of the current local rate has been added to the rental rate of a potential daily apartment in a new building.
Thus, the property’s profitability will be 11% per annum. We are talking about the average possible profitability, which can be noticeably higher or lower depending on numerous factors affecting tourist demand. For example, if there are a large number of long-term reservations (for 5-7 days), the profitability can reach 14-16% per annum.
The second highest level of profitability was real estate in Moscow City — 8%. In the business center of Moscow, on average, landlords ask for 9.6 thousand rubles per day in an apartment or apartment. However, the high cost of apartments and apartments in this prestigious business quarter (636 thousand rubles per sq. m) reduces the profitability of investors.
The Kremlin in the Izmailovo district took third place in terms of profitability — 7% with an average cost of one per day 3.9 thousand rubles. Despite the inexpensive rent, the profitability is ensured by relatively affordable local new buildings (345 thousand rubles per sq. m).