Developers offer favorable prices for apartments, which are often 20-30% cheaper than apartments in new buildings. Such generosity, of course, attracts attention, because buying a home cheaper means reducing the mortgage burden or getting the opportunity to use free funds for repairs, buying furniture and equipment.
However, not everything is clear with this type of real estate, warns lawyer Daria Morozova . If only because until now, apartments, by law, are not equal to residential premises.
What risks does this create for future owners? What are the main differences between both types of real estate? Is it possible to register in an apartment, is it worth buying? We answer these questions in the FAN .
Photo from the personal archive of Daria Morozova /
"A dark horse"
Apartments are still a segment of real estate that is not very clear to ordinary buyers. He was even nicknamed the “dark horse.” Therefore, the experts began by explaining what apartments are and where they came from.
“Apartments as a real estate format appeared for objective reasons. Against the background of the land shortage that had formed in the city, there were territories where it was impossible to build housing. But these places were quite attractive, for example, the city center. The apartments managed to circumvent certain construction prohibitions that apply to residential premises,” said Svetlana Kuzmenko.
In the development business of Europe and America, this segment occupies a significant share, but in Russia it is just developing. Perhaps this is why a situation has arisen in the legal field that the word “apartments” refers to objects that are noticeably different from each other. They have one thing in common - these are non-residential premises that are intended for human habitation.
In Russia, the fashion for apartments came, as usual, from Moscow. In St. Petersburg, the pioneer of the segment was the Pioneer Group of Companies, which built the Ye's complex in Ho Chi Minh City. The idea of an apart-hotel appeared due to... a technical problem. One of the buildings of the designed building did not have sufficient insolation. But for apartments this criterion was not important. Therefore, the developer decided to make something between a hotel and a residential building.
The marketing move turned out to be successful; other developers adopted this experience. For example, Soyuz Invest Development, which built the Salyut mixed-use complex, which implemented the Wings mixed-use complex. Currently, there are about 55 apartment projects in the Northern capital. According to BN, over the past year, supply in this segment has increased by almost a third.
Nuances of ownership
Since the apartments have many shortcomings and are difficult to arrange, problems will also arise with further use:
- Such real estate will be difficult to sell . Few people will want to pay money for housing in which they cannot register, which cannot be equipped with a kitchen for complete comfort.
- The cost of utilities is a separate issue . There is a significant difference in tariffs for individuals and legal entities; the latter pay more for electricity, gas, and water. And apartment owners will have to feel all the difficulties of tariff pressure for legal entities. It is impossible to change the situation, since no one will convert part of the hotel complex into residential housing.
Live or save
Depending on their purpose, apartments are classified into several groups: for living, service and investment.
Apartments in which you can live are usually built on a plot of land intended for use as a hotel. Such properties are often cheaper than regular housing. Often parents buy it for their older children. This type also includes the so-called pseudo-housing. Unlike most apartments, such premises are sold unfinished and unfurnished. An example is the Neopark complex near Pulkovo Park.
“In service apart-hotels (like the mentioned Ye's), some of the owners live themselves, some rent out their units on their own, and some hand them over to a management company and receive income,” commented Yana Vasilyeva. – The investment type is a condo hotel, a special format that combines the characteristics of a hotel and a condominium. It is distinguished by many owners - hundreds, or even thousands. People don’t live in such hotels: they bought a ready-made business and receive income with the help of management companies.”
Ekaterina Arshinova added recreational apart-hotels to this list. These are premium properties in resort locations. For example, “Russian Seasons” from the developer RBI (Sestroretsk).
Summing up
Look at apartments as an investment instrument. Otherwise, this is a very risky investment, threatening big problems.
Buy them when you already have an apartment to live in. You will be able to rent out apartments and receive income from it. Has the situation in the house changed, has it become noisy due to business? Also change the purpose of the apartments. For example, start renting them to small businesses.
The lack of infrastructure requirements fits perfectly into this strategy.
You will be able to buy property for rental in a prestigious area where it is simply impossible to build a residential building. And you will get a queue of tenants. Remember - every situation is unique. Therefore, it is better to consult with a realtor to get an accurate idea of real estate in your area and make the right choice.
Apartments vs apartment
Many visitors to the consultation center were interested in what would be preferable to buy: an apartment or an apartment. This question is multifaceted. To answer this, experts had to compare a number of parameters: cost, possibility of registration, potential profitability, maintenance costs.
According to Svetlana Kuzmenko, until recently, apartments were 20 percent cheaper than regular housing. This is explained primarily by the fact that when constructing commercial facilities, developers are not required to build infrastructure. Now the price dynamics are changing: the cost of apartments is equal to the price of regular housing, and sometimes even exceeds it. Perhaps this is due to a large-scale advertising campaign for the apartments.
And yet, this process has not affected all properties, so many apartments are still cheaper than apartments. Therefore, if we are talking about buying housing for a student, then buying a unit in an apart-hotel is preferable, says Ekaterina Arshinova. If we are talking about a family, then it is better to buy an apartment. The price may be higher, but the difference will be paid off due to the amenities that the owners will receive. These include infrastructure, the possibility of registration, and a clearer legal status of real estate.
A selection of one-room apartments in the Moskovsky district of St. Petersburg
Subtle Differences
In most cases, apartments are chosen for more attractive prices. A square meter here will be cheaper by about 15–20% compared to secondary and primary objects of the classic format. At the same time, the quality characteristics of apartments are usually not inferior to the level of residential complexes. One building can have both apartments and apartments - and the layouts of the two formats are also the same or have minimal differences.
Status matters: apartment sales increased by 30-40%
Most transactions in the capital take place in the mass segment
Director of the Est-a-Tet project consulting department Roman Rodiontsev believes that the location of the new building may also be a key factor for buyers.
— Apartment complexes are often built in areas of business activity, near transport hubs. Such projects are the most attractive for investment for the purpose of subsequent sale or rental, he added.
And according to Sergei Kovrov, head of the analytics and consulting department at NDV - Real Estate Supermarket, buying apartments is a good way to invest money, an opportunity to save and increase the amount by leasing or further resale of the space.
“Due to their price, they are in good demand among students, young couples and people who are planning to open their own business, for example, a design studio or photo studio,” he noted.
Registration with conditions
The peculiarities of living in apartments are well known to everyone. Therefore, the consultants dwelled in more detail on the nuances associated with the apartments.
Thus, many potential buyers were concerned about the issue of registration. We answer: you can register in such real estate. But, firstly, if the complex fits the classification of a hotel (and is not located somewhere in an industrial zone), and, secondly, the registration will need to be renewed every five years. For family buyers, this can be a problem, since it will be difficult to attach children to a kindergarten, school or clinic.
“Unfortunately, modern legislation does not yet clearly regulate this issue,” shared Yana Vasilyeva. “There have already been incidents when owners had to register through the courts because government agencies refused to do so. And still it was only a temporary registration.”
At the moment, permanent registration in the apartments is only possible if the premises are officially transferred to the housing stock.
Will the apartments be converted into housing stock?
So far, the idea of equating apartments to apartments exists only in the form of a legislative initiative. In January 2021, a decree of the Government of the Russian Federation was adopted to determine the legal status of this real estate and establish the possibility of registration in it.
It is planned to submit the corresponding draft law to the government in September of this year, and to the State Duma in October. If the deputies approve the initiative, perhaps already in December 2021 the apartments will be converted into apartments, that is, they will be given the appropriate legal status. However, all this is just perspective.
“If you need permanent registration, it is better to postpone the option of purchasing apartments until the legal status of the property is finalized,” advises lawyer Daria Morozova.
pixabay.com/Pexels
Management by contract
The next burning topic is the relationship with the management company. In service and investment apart-hotels, it is these organizations that are engaged in leasing premises and take responsibility for the income of the owners. In addition, the management company ensures that tenants do not violate the rules of residence and regularly pay rent and utility bills.
A lot depends on the activities of the management company. You cannot change it in apart-hotels, and if it turns out to be “so-so”, then you may not see much profitability. That is why it is important, when selecting a project for investment, to study not only the developer, but also the management company: what experience it has, what projects it has had, what services it provides, what kind of profitability it promises. You need to read reviews about management companies online and collect opinions.
Insufficient attention to this issue is fraught with consequences. One day, the owners of one of the apart-hotels contacted BN.ru and asked to make a fuss about the fact that the management company had not paid them money for about nine months. Then the issue was resolved successfully - the Criminal Code was replaced. But this is a rare case.
Cooperation between the investor and the management company is regulated by concluding an agreement. In turn, the type of contract depends on the profitability program.
If the investor has chosen a guaranteed income, then a long-term lease agreement is signed, which is subject to registration with Rosreestr. A maximum income program typically requires an agency agreement. Contracts with management companies cannot be terminated unilaterally, and they provide for penalties for both parties in case of violations.
In most apartment complexes, drawing up an agreement with the management company is a prerequisite. You won't be able to earn income on your own. For example, in the project Status by Salut! A lease agreement simply cannot be concluded without a lease agreement.
Problems
Apartments are also built as temporary housing upon receipt of permits. They can be registered as property only after the building has been put into operation in compliance with all legal norms in construction.
According to the documents, the apartments must meet the characteristics of temporary hotel-type housing. But the purchase of such special real estate itself can be made at different stages - during construction, after commissioning and after ownership has been formalized. And each stage determines its own design features:
- When purchasing at the construction stage, it is difficult to obtain a guarantee that the final result will correspond to the design documentation.
- If, during commissioning, the commission determines that the house was built in violation of the design and does not meet the standards of hotel-type buildings, the commissioning certificate may not be received. This means that the buyer will not be able to register the purchased apartment as his own property.
- Difficulty in registration may also arise when the land for a hotel complex with apartments may belong to a third party or have a different category of intended purpose.
As a result, you can invest money in construction, but you won’t be able to register ownership of the property later. And judicial protection in this case rarely gives any effect to those who decide to buy apartments.
Income with and without guarantee
The amount of income is, perhaps, the main question that interests potential buyers of apartments. Each aparthotel offers a certain profitability package. The minimum is about 8%, the maximum is 20% (sometimes you can find higher numbers, but these proposals need to be studied especially carefully).
Is it a lot or a little? According to experts, bank deposits now provide a yield of 6.0-6.5%, apartments - 7.0-8.0%, commercial premises - about 12.0% (but the entry threshold in the latter case is quite high). The apartments look advantageous against this background. However, the data on them can still be considered conditional - due to the fact that the segment is still too young. More reliable statistics will appear in five to ten years.
And yet, how much money can an apartment bring in per month? This figure depends on many factors. In particular, on the amount of investment.
“Suppose you invested two million in the purchase. With this money in the early stages you can purchase a small room with decoration and furniture, a fully equipped room. You can choose either a guaranteed return program - it is tied to the cost of the investment (8.8% per annum), or a maximum return, which depends on the amount received for rent and is up to 20%. In the second case, in the first year or two you will receive about 10%, then the percentage will grow and reach its maximum in the fifth year. This is approximately 40 thousand rubles. per month,” explained Yana Vasilyeva.
According to Svetlana Kuzmenko, the most profitable and reliable for an investor is a guaranteed income. If there is no such program, then you should think about whether you need to invest money here. Another criterion that is worth paying attention to is the average occupancy rate of the apart-hotel. If well managed, the room should be occupied at least 20 days a month. If not, then there is a defect in the location or control.
You can calculate your future income yourself. You calculate the average rental cost in a location per day (data on the monthly cost is available in open sources), multiply by the number of “filled” days and from this amount subtract overhead costs (if this is a full-fledged hotel - about 40%). If the figure you receive differs significantly from what the developer said, look for another option.
What to consider when purchasing
If, nevertheless, the opportunity to purchase an apartment is attractive, you need to take into account several features of such an operation in order to feel the benefits of the purchase:
- It is important to enlist the help of an experienced lawyer in this matter. Payment for his services may be high, but he will protect against many transaction risks.
- You should choose apartment-type apartments for purchase. They stand out as a separate object and may have more household amenities.
- It is advisable to complete the transaction after commissioning. There is no risk of losing money due to bankruptcy or fraud of the developer. And you can make sure that the result of the building corresponds to the design; this is important for safety.
- When making a purchase, you need to find out the possibility of using common property, such as a parking lot, a hall, or a local area.
- You should inquire about the level of utilities and tariffs of suppliers.
Three "l"
Many people know about the three “L” rule that is mandatory for the real estate market: location, location and location again. A competent choice of location when purchasing an apartment is also an extremely important component of income.
For example, an apartment hotel located in a residential area will be of interest primarily to students or temporary workers. This option is suitable for long-term rental, which brings a stable but small income. If the complex is built in the city center or in another elite location, then it will be attractive to tourists, including foreign ones. This will provide an opportunity for higher profits.
“If you buy apartments in a remote area, then no matter what the sellers say, you will most likely rent them out for the long term. And this is much cheaper than daily rent. Many developers are optimistic about their apartments as potential short-term accommodation. These promises must be approached critically. And look at the ability of this project to attract tourists, and not permanent residents,” advised Svetlana Kuzmenko.
St. Petersburg is a tourist city, and a significant part of the apartments are built for guests. If the management company works professionally and cooperates with aggregator sites (Booking, Airbnb, etc.), then there will always be a flow of tourists. By the way, another factor is now contributing to the growth in demand for apartments - the ban on hotels and hostels in residential buildings, which came into force on October 1, 2021.
What it is
Initially, apartments were called comfortable apartments, equipped with furniture and other furnishings, located in hotel complexes. For our country, such real estate is still new, but it has already become an object of purchase and sale. What features do the apartments have?
- Such apartments provide the owner with constant income, as they are rented out. Apartments are rented for different periods; you can live in them for years.
- Apartments are being set up in hotel complexes.
- The owners furnish the interior according to a design project; the housing should look stylish, prestigious, and comfortable.
- What other features do the apartments have? Usually they accommodate guests with a good financial situation, because rent will cost much more than renting a hotel room. Those who can pay for it and who value comfort and privacy choose such an apartment for temporary residence.
- In addition to full, beautiful furnishings, the apartments are also equipped with all the necessary utilities and have a small kitchen.
Like a hotel room, apartments are serviced by hotel staff. Service is carried out at a convenient time for the client, includes cleaning, changing bed linen, cleaning plumbing, etc.
Also, such apartments must have their own parking spaces; they are guarded by the hotel complex's security service. Other services may also be provided.
Most of the apartments are in megacities, where representatives of business, show business, and elite circles come. After all, paying for such a number is not cheap. Apartments are also opening in resort towns, where wealthy people want to relax with their families in the most comfortable environment.
The construction of apartments has become one of the areas of work for developers; there are certain requirements for such housing and its arrangement.
Recently, the term apartments have begun to be used in the real estate market; such apartments are actively put up for sale. They can have a different number of rooms, different areas and layouts.
Apartments with several levels are also offered. All types of such housing have a common feature - they are furnished, equipped with household appliances, and have a specific interior design.
Spending and installments
As already mentioned, the apartment owner must remember to subtract overhead expenses from the amount of potential income. They consist of repair costs, utility bills and taxes.
The cost of repairs is difficult to calculate - it depends on how exactly the owner wants to equip the unit and how the premises will be used. Another nuance is that common property and public accommodation belong to the apart-hotel, which means their maintenance falls on the client.
As for payment for housing and communal services, in most cases it will be higher than in apartments. The fact is that in residential buildings, part of the costs is compensated by the city, and apartments are classified as commercial premises. Therefore, heating and water supply will cost 20 percent more. And if you add additional services (cleaning, food delivery, laundry, etc.), it will be even more expensive.
And about taxes. If a person purchases an apartment that can be rented out independently, then he will have to pay personal income tax in the amount of 13%. You can reduce this rate to 6% if you register as an individual entrepreneur and switch to the “simplified” system.
Apartment owners will have to pay property tax at the rates for commercial real estate - depending on the location of the property, the status of the land plot and other parameters. So, if the apartments are part of an MFC, where the share of retail and office real estate exceeds 20% of the total area, then the rate may be 1% of the cadastral value. And if the units were built as part of a residential complex, then the rate will be within 0.3%.
Although rates for apartments are noticeably higher than for housing (0.1%), their cadastral value is in most cases lower. For example, in one of the apart-hotels on Moskovsky Prospect, a room costs 5 million rubles. has a cadastral value of only 1.7 million. Therefore, in general, the tax amount for apartment owners and apartment owners is quite comparable.
It is also worth knowing that when purchasing apartments you cannot receive a tax deduction, and it is prohibited to use government subsidies, including maternity capital. But you can count on a mortgage or installment plan.
“Mortgages for apartments have already reached the same rates as loans for apartments,” said Yana Vasilyeva. – Our partner Absolut Bank provides a subsidized rate of 7.99% for the entire loan term. But the minimum rate – 5.00% – does not apply to apartments. There are different options for installments. For example, in our Vertical project on Bolshoy Sampsonievsky, the installment plan is valid for another year after the start of the hotel’s operation. But the developer of Swallow’s Nest gave installments for ten years - perhaps due to the not very good location.”
Common property
Owners of apartments in an apartment building own common property on the right of shared ownership. That is, common areas - basement, attic, local area and others - are the property of the residents.
Reference: The procedure for the use and disposal of common property is prescribed in Chapter 6 of the Housing Code of the Russian Federation.
Apartment owners do not have ownership rights to common property. That is, if the owners want to make a joint vestibule for several rooms on the staircase, they will have to buy or rent this territory from the owner of the complex.
