How to rent out an apartment remotely if you are in another city or country

Renting out an apartment is a good way to get a stable source of income. But renting out an apartment remotely is problematic if you are in another city or in another country. It is not always possible to arrive, and this also increases costs. At the same time, it is necessary to conclude agreements with new residents, monitor the property, and look for tenants.

Many people, due to their reluctance to let the situation get out of control, refuse to rent out an apartment in such a situation.

This solution cannot be called optimal for a number of reasons:

the apartment still requires certain and constant costs. These are utility bills and property taxes at a minimum.
rental housing depreciates faster. Maintenance is required to maintain it.
the owner makes monthly payments to the capital repair fund.
No one monitors the condition of the apartment. You may be flooded, there may be problems with your riser and more. The residents themselves are interested in maintaining the apartment in good condition. But closed apartments are risks.
an apartment in which no one has lived for a long time may be of interest to criminal elements. The risk of theft increases. Also, people can move into such property without permission.
Thus, you need to monitor what is happening in any case. And investments cannot be completely avoided. Therefore, it’s worth figuring out how to rent out an apartment remotely.

Comprehensive property management from Retail-Realty

Should I insure my apartment before renting?

Insurance will allow you to protect yourself in case of emergency, for example, if your tenants flood their neighbors. As a rule, you can insure the decoration and equipment of the apartment and civil liability to neighbors. Then the insurance company will compensate for damage in the event of fire, theft, flood and other incidents that result in damage to the life, health or property of neighbors. To receive compensation, the insurance contract must indicate that the apartment is for rent (the money will be paid only if the tenant did not act intentionally).

You can insure your apartment against accidents together with the tenant. But it is better to do this yourself, since in the event of an emergency it will be the owner of the apartment who will compensate the damage to the neighbors. After compensation for damage, compensation can be demanded from the employer, but obtaining it in practice is not always possible.

Typical mistakes when renting out an apartment

Reviews about real estate in Sochi are very varied. As a rule, tenants complain about several shortcomings:

Property owners choose housing for themselves. Keep in mind that potential clients think differently. There is no need to buy an apartment with a large square footage, because it is often rented by business travelers or vacationers. The most popular, according to reviews of Sochi, are studio apartments. At the same time, the rental price will not decrease significantly, but purchasing, maintaining and cleaning will become much more profitable.
The high cost depends on the geographical location. Don't try to rent an apartment on the outskirts at the price set in the City Center.
Please note that most visitors use public transport or rented cars. There should be convenient transport links and parking nearby.
If there is no developed infrastructure nearby, reviews of your apartment in Sochi will not be the most flattering. Restaurants, cafes, shops, and pharmacies should be located not far from the house.
Don't make expensive repairs. Large expenses take a long time to pay off, and there is a high probability of damage. The exception is real estate that is initially positioned as business or elite class.
Decide on your circle of potential clients. There is no need to spend money on an expensive apartment by the sea. You can rent out housing on the outskirts to young families who come to work and business travelers.

Meet offline

“Never rent out an apartment to your friends. This is the loss of a friend! - Babichev advises. It is unlikely that very young couples who have moved away from their parents, who live in the same city, will rent housing for a long time: after a fight, they will run home. Fellow students and colleagues renting housing for two may also quarrel and because of this they will either move out altogether, or the second room will later have to be rented out separately, so that the housing will actually turn into a communal apartment. Realtors do not recommend renting out housing to tenants who, before they have moved in, begin to impose their own rules: I don’t like this, but this is what I will do. The owners then have a lot of trouble with them. Pay close attention to lawyers - they are difficult to argue with. Despite the assurances of pet owners, there are no perfect animals that do not smell or scratch anything.

But families with children, who are not very welcome by novice landlords, often turn out to be reliable tenants, since they become “attached” to schools and kindergartens. But here the situation depends on the age of the children and on how much the parents look after them.

There is now no demand at all for apartments that have not been renovated for decades, even with low rental prices

“I would not advise making a decision after talking with the future tenant on the phone,” says Yatsevskaya. — We need to meet with employers, talk in person. It happens that the owner of an apartment does not want tenants with cats and dogs, and when he meets a person, he already forgets about animals, because the person suits him. You can meet with all the applicants and make a decision later.”

Is it possible to buy an apartment in Moscow to rent it out and live by the sea?

Apartments in a new building
A cunning plan, which is worth saying a few words about, is buying an apartment in Moscow in order to then rent it out and live with this money in a cheaper city, preferably abroad and preferably with a view of the sea. Typically, Bulgaria, Crimea, Thailand, and Vietnam are considered for these purposes. As practice shows, this plan contains serious risks and pitfalls that many people forget about .

Alisa, Moscow, rentier:

“I rented out one apartment in Moscow, and the income from it, in principle, suited me, so I invested money in the purchase of a second one - at the construction stage - with the goal of renting it out and moving abroad. A couple of months after the house was put into operation, the ruble “collapsed”. As a result, I now receive less in foreign currency from renting two apartments than I did from one. Accordingly, plans to move failed, and the 100 thousand dollars spent will not be returned in the next 10 years, probably until the ruble rises along with the price of oil. It was her own fault, she did not take into account currency risks.
In addition to currency risks, there is the fact of constantly rising housing and communal services tariffs and the risk of outflow of residents. Thus, the massive outflow of migrants this year caused a collapse in the rental housing market in Moscow and the region. Taking into account all factors, rentier incomes fell in real terms not even by 2, but by 2.5-3 times.
If we take one conventional apartment, which in Moscow, for example, an ordinary person can only buy at the construction stage outside the Moscow Ring Road, 20-30 minutes from the metro, then it will cost about 3 million rubles, plus the cost of finishing - 400 thousand. Today you can rent out such a ready-made option for 20-24 thousand rubles, a communal apartment will cost 3-4 thousand.”

Thus, you will get 20 thousand at best. This is less than 7% annual return. From these 20 thousand rubles you will need to pay 10-12 thousand for rent in a small Russian city. And abroad you won’t be able to get anything decent with them at the current exchange rate, those days are gone. It would be much smarter to buy two apartments with this money in the city where you will live, and avoid all the difficulties with renting out the apartment remotely. Renting an apartment in Moscow and not working is a long-forgotten utopia, relevant for the late 2000s.

Also read : How to prepare an apartment for rent.

What to do if residents don’t want to leave

Another advantage of a short-term contract is that it solves the problem in case the tenants refuse to pay and do not want to move out.

Currently, termination of a tenancy agreement is possible only in cases provided for in Art. 687 Civil Code of the Russian Federation. The bottom line is that the tenant can terminate the contract by notifying the owner of the property 3 months in advance. It’s more difficult for the landlord - the contract can only be terminated in court. There must be compelling reasons, for example, damage to property.

You can also terminate the contract through the court when the tenants do not pay for their accommodation. If your contract is registered with Rosreestr, the delay may be 6 months. If the contract is short-term, it is enough not to receive payments for 2 months.

You can try to avoid such problems by stipulating in the contract the ability of the landlord to terminate this contract out of court. For example, by notifying the tenant 1 month before termination by registered mail to this address and adding that the very fact of notification means the tenant’s consent to terminate the rental agreement.

Most likely, such clauses will be declared invalid in court, but, as practice shows, their presence is often enough to find a compromise with the tenants.

What should you consider about a trust agreement?

A trust agreement is an effective tool for renting out an apartment. But it must be compiled correctly. It is important that the text of the agreement complies with current legislation (Chapter 53 of the Civil Code of the Russian Federation). Also, do not forget about other legal acts. Therefore, before signing such an agreement, you need to have it reviewed by a lawyer. It is advisable to order development from scratch. In this case, your interests will definitely be reliably protected.

The contract itself is certified by a notary. This way, in the event of a conflict between the apartment owner and the intermediary, there will be much fewer questions regarding the agreement.

However, please note that the trust management agreement will not be valid without registration with Rosreestr. In 2021, this service costs 2 thousand rubles. And to register the agreement with Rosreestr, you will need to present an apartment acceptance certificate. By the way, its compilation is largely in your interests. Thanks to this document, you will record the condition of the apartment at the time of transfer to the intermediary. And if the property is seriously damaged, you will be able to file a claim for damages quite reasonably.

An important point: a trust management agreement does not replace a power of attorney. The reverse is also true. In order for an agent to enter into a rental agreement with future residents on behalf of an owner located in another city, he needs a power of attorney. However, as mentioned above, this alone may not be enough.

Do I need a realtor?

If you want to save time or are renting out a home for the first time, it makes sense to involve a realtor - a private real estate specialist or an employee of a real estate agency. He will not only answer calls and show the apartment to potential residents, but will also help determine the price and draw up documents.

Do not contact several agencies at once, as this may provoke competition between realtors, which is why they will begin to offer your apartment at a reduced price in order to quickly attract tenants. In addition, if the property is advertised on all websites, this may arouse suspicion among tenants.

Insurance

“It is recommended to insure an apartment being rented out. In case of various unpleasant incidents, this will help to avoid losses. Abroad, insurance of rental properties is common practice. Unfortunately, we don't have one yet. In Russia, the cost of insurance is approximately 3% of the annual rent,” says Yaroslav Korolev, owner of an insurance services agency .

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Terms of the rental agreement

Let's move on to the most important point: drawing up the contract. If you hired an agency, then you already have one, and if you figure out how to rent out an apartment yourself, then you can easily find a sample online.

Let's go through the most important points. The contract must indicate:

Details of all parties: passports, full names.
Information from an extract from the Unified State Register of Real Estate, which confirms ownership.
Term of employment - most often it is concluded for a year, and then extended, if necessary.
Date of signing.
Terms of termination, rights and obligations of the parties and everything that you want to discuss separately.
Who pays utility bills?
If you take a deposit, write about this, indicating the exact amount, and write down under what conditions it remains with you.
You can make an inventory of your property here.

According to the law, an agreement for a period of more than 11 months must be registered with Rosreestr and taxes must be paid on this income. For citizens of the Russian Federation the rate is 13%.

If you enter into an agreement for less than 11 months, the agreement does not need to be registered, just signed by both parties. But according to the law, you still have to pay tax.

Make a deal

“There are several ways here. In the first case, the rental agreement can be concluded by a representative-intermediary. Any notary can issue a power of attorney for him to rent out and resolve various everyday issues with the management company, housing and government organizations. For example, I recently had to go with a power of attorney to the MFC so that the landlady could start counting water again. This could not be achieved without a visit. In the second case, if you decide to rent out the apartment yourself, then you draw up the contract remotely and send it via email or registered mail,” said realtor with 14 years of experience in renting out apartments and rentier Alexander Kharybin .

Person or agency?

“If we are talking, for example, about the south of Russia, then such issues there are still being resolved the old fashioned way. Since Russia is a country of prevailing interpersonal connections, this is mainly solved through friends, says Gleb Podyablonsky, head of the real estate registration department of the law firm URVISTA. – If you don’t have such in the city, then it makes sense to contact a real estate agency rather than a private realtor, since resolving controversial issues with a company is, based on experience, easier than with an individual. The company values its reputation and bears financial responsibility under the contract. It is important to make sure that it has existed for a long time and is actively operating. It makes sense to check whether the agency you are contacting has experience in the area of tenancy trusts.”

A frequent realtor from St. Petersburg, Elena Lavrinovich, provides trust management services herself and talks about her experience: “I have been involved in real estate for more than 15 years, and rental trust management is one of my areas of activity. In my case, this is not a separate service for which I purposefully look for clients, but rather a consequence of working with purchase and sale. But there is a nuance: in real estate transactions I work as a representative of an agency, but in the future, trust management of rentals is a service that I provide as a private agent. If we have a good relationship with the client during the preparation of the transaction, then I can offer to further deal with his real estate. Another option is recommendations from those with whom I have previously worked or am currently working.

Explore prices

First, you should look at how much similar apartments in your area are rented for on Avito, Tsian or Domofond. The price range may be large, but the average cost will still become clear.

In Tambov, for similar two-room apartments they asked for an average of 16,000 RUR. I do not advise putting a price below the average in the advertisement. If a potential tenant starts haggling without even seeing the apartment, it means that this apartment is beyond his means. There may be problems with it in the future.

But you can raise the price a little: if you liked the apartment according to the ad and are ready to look at it, then a couple of thousand will not make any difference. If you have already agreed to sign the contract, but the renters find the price too high, they can always ask for a discount.

I was able to rent out my apartment for 18,000 RUR plus 4000 RUR for utilities. This is RUB 2,000 higher than the average price in my area.

And also, based on the experience of my friends, there is a direct correlation between the cost of rent and problems with tenants. When rents are high, tenants tend to earn well, are responsible, punctual, clean, and know the value of things. And the lower the price, the more problems arise.

I was told a story that in one apartment, which was rented out for only 6,000 R a month, the residents smoked right in the room, and stewed the bulls on everything they could get their hands on. As a result, all the income from the rental did not even cover the repairs.

Remote control over the condition of the apartment

The opportunity to rent out an apartment while in another city or even another country attracts many today. But the owners are afraid that something might happen to their property. Damaged repairs, broken furniture, stolen household appliances - problems can be different. And this is not to mention the troubles with neighbors.

Experienced realtors recommend different ways to control what is happening:

conclusion of a trust management agreement, which would detail the responsibilities of the agent for monitoring tenants;
conducting interviews with residents via Skype;
receiving the insurance amount as a guarantee that everything will be in order with the apartment. It must be taken into account that if these funds remain with the owner, the tax authorities will consider them income. Therefore, you will need to pay tax on the profit received;
installation of surveillance cameras at the entrance, which will allow monitoring attendance;
video shooting of the apartment, which can be done once a month by agreement;
drawing up a report on the payment of utility bills with supporting documents attached;
registration of the real estate acceptance certificate;
renting out an apartment only under a specific rental agreement, which would carefully outline the responsibilities of the tenants;
creating a photo report;
keeping in touch with neighbors, friends and others;
monitoring advertisements for apartment rentals (the agent’s approach to the agreement can be tracked by how much information he provides, how actively he searches for tenants, etc.).

It is possible and necessary to rent out an apartment remotely. You need to delegate certain actions to the intermediary. However, you still have the opportunity to control what is happening. The exact mechanism depends on what you agree on.

But keep in mind that overly strict control can scare away many tenants. Not everyone likes installing cameras and regularly filming. Therefore, such moments need to be discussed in advance. And it is worth preparing for the fact that some potential tenants will refuse to rent such housing.

Renting an apartment while in another city or even country is quite possible. The main thing is to figure out how to approach this.

Second castle

“For unexpected situations, it is worth installing an additional magnetic lock on the door, controlled remotely from your smartphone. It is easy to close and open at any time and being anywhere. Once my landlords did not pay my rent on time and stopped taking my phone. The owner remotely closed the door to the empty apartment. As soon as the tenants returned and could not get home, they immediately got in touch,” advised Alexander Kharybin.

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Deposit

“We should definitely take a security deposit from landlords and not allow them to live for the last month on these funds. They should be returned only after the tenant has moved out and you have checked the property. Because there have been cases when tenants left dirt or something broken in the apartment. If there is no deposit, then no one will compensate for the costs of cleaning and repairs. It is also worth specifying penalties for early termination in the contract between the owner and the tenant. Landlords who are cunning and promise to move in for a long time, but want to move out after living for only a couple of months, get scared and immediately fall off,” says Alexander Kharybin.

What happens if you rent out an apartment illegally?

Perhaps there will be no further problems, if the tenants are adequate, relations with neighbors are normal, and you take the money in cash, then no one may even know about the rent.

If the management company, neighbors or anyone else writes a statement to the tax office or local administration, the tenant may be fined.

The fine for an individual for failure to declare is 5% of the total income, tax concealment is also taken into account, and this is 40% of the total amount. And in addition you will need to cover all debt, usually for the last 3 years. They can also be fined for illegal business activities without a legal entity or individual entrepreneur - this is from 500 to 2,000 rubles.

It is better to rent out an apartment legally.