Calculation of the return on costs for an apartment based on its cost and rent
I suggest conducting an experiment and calculating how long it will take for your apartment to pay off when you rent it out. It's no secret that apartment and rental prices are different in different cities. In my city, the average cost of a two-room apartment is 3 million. At the same time, you can rent them out for 13-15 thousand per month.
Let's do some calculations. Divide 3 million by 15 thousand and get the number of months after which the apartment will fully pay for itself. The answer is 200.
Now we divide 200 months into 12 months of the year. We get 16.5 years. Such an apartment brings 0.5% per month of its cost. Multiplying this number by 12, we get 6% per annum. Thus, by investing money in an apartment, we will only protect it from inflation without receiving real income.
Real estate profitability by city over time
Nuances of the agreement
- I am planning to sell a garage that is currently under lease, the validity period of which is not specified in the contract. The tenant does not agree to let the buyer in for inspection. He also says that the contract is unlimited... Is it really impossible to terminate it? A. Sanko, Minsk
— A lease agreement without specifying a validity period can be terminated. According to Art. 581 of the Civil Code, it is considered not to be of unlimited duration, as may be mistakenly assumed, but concluded for an indefinite period. In this case, each of the parties has the right to refuse their obligations by notifying the other party in writing at least a month in advance, and in the case of real estate - three months in advance. It is better to send a warning letter about the termination of the contract to the tenant’s home address with notification. If the tenant, after warning, does not want to leave the garage, then he must be sued.
It is worth noting that the transfer of ownership (lifelong inheritable ownership) of leased property to another person, as a general rule, is not a basis for changing or terminating the lease agreement.
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Calculation of return on costs for a garage
The cost of a garage also varies. In my city, you can buy a decent garage for 200,000 rubles, and rent it out for 3,000 rubles a month. Almost any garage is suitable for renting out. One option is shown below.
You can get a garage like this for 150-300 thousand
Can you tell me a little? But if we take the same 3 million that we can spend on an apartment and buy garages for the entire amount? We will be able to buy 15 garages.
By renting out each garage for 3,000 rubles, we can receive 45 thousand a month. This is already a significant amount for the regions.
The garage's payback is 1.5% per month, 18% per year. This means that after 5 and a half years the garage will fully pay for itself and will generate net profit.
Garage as an investment
How justifiable are the costs of purchasing and owning a garage? What advantage do we have, besides the hope that the market value of this object will grow faster than the ruble depreciates? Drom.ru figured out whether there is any economic benefit from such real estate.
Costs for purchasing and maintaining a garage
Prices for ready-made garages depend on many factors: area and condition, what it is made of, availability of communications (electricity, heating, water, etc.), where it is located, whether it is convenient to get to it, legal status, etc. In Moscow there are advertisements for the sale of a rusty box in a “field” for 5,000 rubles, and someone is asking 39 million for 212 square meters of a permanent building. The average price of a garage in the capital is 800,000 rubles. In St. Petersburg, at the same average cost, you can find an advertisement for the sale of parking spaces with a total area of 30 m² for 57,600,000 rubles. In other large cities of the country, the price range is noticeably smaller: in Arkhangelsk and Nizhnevartovsk the average garage costs 670,000 rubles, in Vladivostok and Irkutsk - 580,000, in Rostov-on-Don and Murmansk - 500,000, in Yekaterinburg - 480,000, in Samara and Chita - 450,000, in Khabarovsk, Kazan, Voronezh - 400,000, in Nizhny Novgorod, Novosibirsk, Perm, Tyumen - 350,000, in Volgograd, Saratov, Chelyabinsk - 250,000 rubles.
Building a garage yourself, if it is not a palace, or buying a “constructor” for assembly will cost much less - 10,000–30,000 rubles. Separate investments will require additional arrangement (creation of an inspection hole or cellar), as well as the supply of electricity. But the total costs will largely depend on the cost and complexity of designing a space for a garage.
If the garage is owned, then every year you need to pay property tax for individuals. Its regional rate can be found on the website of the Federal Tax Service. Most often, the cadastral value of the property is taken as the tax base; the tax amount ranges from 0.1 to 0.3% of this amount. If the parking space was registered as a share in non-residential premises, then a rate of 0.5% is applied to it. If municipal authorities have determined the total inventory value as a base, then for the cost of a garage up to 300,000 rubles inclusive, the tax amount will be 0.1%, from 300,000 to 500,000 rubles - 0.1–0.3%, more than 500,000 rubles - 0.3–2%. If, in addition to the garage, the land underneath it is also registered as a property, then you need to pay land tax on it - on average about 1.5% of the cadastral value of the site (rates are approved by regional authorities). For a garage owned by a cooperative, its owner pays fees, which, in addition to compensation for the above taxes, may include expenses for laying a common internal road, installation and maintenance of automatic gates, wages for a watchman, etc. For used electricity, water, heating, if any, you need to pay separately according to the meters. In principle, the above expenses are not so large - from several hundred to several thousand rubles per year, but they still need to be paid.
Your own garage without a car
Oddly enough, garages are often purchased by those who do not have a car. One of the most common situations: a specific demand coincides with a suitable supply. For example, homemade preparations are very popular in a family, and to store them you need two or three refrigerators, which, firstly, cost money themselves, secondly, take up space in the apartment, and thirdly, consume electricity. Therefore, buying a garage with a cellar at a reasonable price solves the problem. For those who like to spend time with a large group, turn up the music louder and barbecue without going outdoors, the garage can be an ideal place for hangouts. And it will pay off due to the money saved on food and drinks that would have to be ordered in cafes and restaurants.
Another option for using a garage is to create a warehouse for both personal belongings and business. Renting special warehouses for storage costs from 500 rubles per square meter per month - inexpensive if used for a short period of time (for example, if you need to store things while renovating an apartment, office or store) or in a small volume. If things need to be stored for a long time and in large quantities, then a garage may be more profitable. The main thing is that it does not leak, does not flood, that there is normal ventilation, otherwise furniture, carpets, textiles, etc. may be irrevocably damaged.
A garage may simply be necessary to create a compact production facility or a repair service for something. To install a lathe, a carpentry table or one lift, 12–30 square meters is enough, but another room of a similar area is difficult to find, and it will cost significantly more. But you need to keep in mind that such use of the garage will most likely be illegal, since the status of the premises and the land on which the garage stands does not imply its use for any other purposes other than storing vehicles and personal belongings. However, the inspection authorities need to prove that the owner of the garage is engaged in business activities and is not assembling a kitchen set for himself or repairing a friend’s car. But if they prove it, they will have to pay a fine of 5,000 rubles and, possibly, go through several inspections by firefighters and other supervisory authorities. Now there are more and more active ideas to bring the garage business out of the shadows, but so far no concrete measures have been taken.
The least troublesome and most common way to make money from a garage is to rent it out to car owners. However, under normal conditions (a standard garage on the outskirts of the city), investments will take a very long time to recoup and will begin to make a profit only after a few years. In Moscow, the average price for renting a garage per month is 7,000 rubles, in St. Petersburg - 6,000, in Yekaterinburg - 4,000. It turns out that without taking into account inflation and other economic factors, the money invested will be returned on average in ten years. Money invested in a garage in the city center or in a residential complex where there are not enough parking spaces will be returned faster. But the initial investment will be much larger and will be comparable to the price of the apartment, the income from which is more stable and higher. And if you put money in a bank account, then, for example, at 6% per annum, income from a million will be 5,000 rubles per month - the same as renting out a garage. Only without the hassle of registration, searching for clients, maintaining the premises in marketable condition and other waste of effort, time and money.
Storing your car
For a car owner, the benefits of having your own garage are obvious. For some, the problem of having a parking space is relevant, for others it is about the safety of the car, and for some, comfort is important. Buying a garage next to your home solves all these problems at the same time, plus there is a place to store a seasonal set of tires, tools, a spare battery and other things, as well as a room where you can watch football with friends.
If you compare buying your own garage and renting someone else’s, then on average your investment in real estate will be compensated in the same ten years. Using secure parking is more profitable, but this depends on the region and area. In some cities there are options for 1,500–3,000 rubles per month. But in some places they charge 200 rubles per night, that is, in a month they add up to 6,000 rubles, and this is already comparable to renting a garage. It will be even more expensive to leave your car overnight in a paid parking zone. At the same time, unlike a garage, you cannot store anything in the parking lot, and in winter the car needs to be cleared of snow, so your own box is clearly more profitable.
Registration of a transaction for the purchase of a garage
A garage is a piece of real estate whose change of ownership must be registered.
The simplest procedure is to formalize a transaction for the sale of premises, the status of which has already been legally determined, that is, it is registered in the register with all the necessary attributes: assigning a number to the object, entering it in the cadastre, fixing the address and area, and registering ownership. Moreover, such a garage can stand alone, be located on the territory of a garage cooperative, or be part of a multi-story garage complex - the main thing is that it is owned by a specific person who can confirm this. The purchase is formalized by an agreement, on the basis of which the data of the new owner is entered into Rosreestr. If the garage and the land underneath are two different objects, then two transactions need to be completed. There may be a situation where the garage is owned and the land is leased, then a new agreement must be concluded with the owner of the land.
But often garages in cooperatives are not privatized. And in this case, buying a garage (or rather, a share in a cooperative) is essentially a transfer of the right to use, and not the right of ownership of real estate. The former owner leaves the group of companies, the new one becomes its participant. In order to become one, you need to write an application addressed to the chairman of the cooperative and receive confirmation from him or from the association’s council of acceptance. That's all. The details and complexity of the procedure depend on the charter of the Civil Code. This document also stipulates the conditions for using the garage, share contributions, the procedure for selecting the board, making decisions, etc. But we emphasize that when you join the members of the Civil Code, you can only use the garage, it does not become the property of the new owner.
In order to become a full-fledged owner of a garage that is part of a cooperative, you need to make some efforts. To begin, obtain from the chairman the title document of the cooperative - the decision to create, as well as documents regulating land relations: an extract from the state register on land ownership, a lease agreement or another document confirming the legality of the construction of garages on this site. If there are no such documents, then you need to get them, not for yourself, but for the cooperative.
Quite often, difficulties arise when the land was allocated for free use - now there is no such legal form. If this happened before October 2001, then the land can be privatized for free; if after that, you need to negotiate with the owner (most often the municipality) about the transfer, purchase or lease of the land plot. Both operations require the issuance of a cadastral passport for the site. If everything is in order with the cooperative’s documents, then you need to obtain a certificate of membership and payment of the share from the chairman, issue a cadastral passport for a specific garage and submit an application to Rosreestr for registration of ownership rights with payment of the state duty.
If you buy a garage without any legal documents and do not formalize it, then in the future you may encounter two problems: the garage may be demolished as a self-construction, or when the territory is redeveloped, they will refuse to pay compensation for the demolition. Therefore, you need to decide whether it is worth the risk of investing in such unreliable real estate.
Other benefits of a garage
In addition to a good return on investment, a garage has a number of other advantages compared to an apartment, namely:
- No repair costs. Having purchased an apartment, you will most likely immediately begin renovations. No need to renovate your garage! This helps to avoid not only unnecessary cash costs, but also time. You can start renting right away.
- No utility fees. This is another compelling argument in favor of a garage. Unlike an apartment, in which you have to pay for electricity, gas, heating, etc. You won't have to pay any utilities. This seriously increases your profits.
- Reliability. By reliability I mean the safety of the object itself. It is no secret that a fire or gas leak may occur in a neighboring apartment, as a result of which your property may suffer. The risk of unfavorable situations occurring with the garage is extremely small.
What tax will you have to pay?
- Do I need to pay for the procedure for concluding a garage rental agreement? And how to properly pay taxes to the landlord? V. Paperny, Minsk
- You need to pay. The procedure for registering a garage rental agreement in accordance with clause 1.14 of the list of administrative procedures carried out by government agencies and other organizations upon applications from citizens (Decree No. 200) is paid. Cost - 0.2 base units (5.8 rubles). The body carrying out the administrative procedure is the executive committee.
Payment of income tax in fixed amounts is made monthly no later than the 1st day of the month for which income tax is paid in fixed amounts. If the rates change, the income tax payable in fixed amounts is recalculated from the 1st day of the month following the month in which the change occurred.
Payment can be made through ERIP or at a bank. Information about the payer's account number can be clarified at the tax office at the lessor's place of residence.
How to rent out a garage? More details
Disadvantages of a garage as a rental item
There are not many disadvantages to a rental garage. Perhaps only 2 can be singled out.
- Low income from one object;
- Possible difficulties in finding clients;
In the first case, everything is simple. You can’t live on 3 thousand a month, right?
If you only have 1 garage, it will certainly be a good additional income, but it is unlikely to feed you and your family. It will take a long time to save up for another garage using only rent.
It is also worth remembering that garages are rented much less often than the same apartments. Because of this, even with a small number of competitors, you may have difficulty finding clients.
How do rates differ?
- Do personal income tax rates differ for renting out a garage in Belarus? V. Semak, Baranovichi
- Yes. For example, Minsk has the highest income tax rate: for renting out a metal or wooden garage or parking space it is 11.1 rubles. per month; reinforced concrete or brick garage - 14.2 rubles.
In regional centers - Brest, Gomel, Grodno, Vitebsk, Mogilev - the income tax rate is lower: for renting a metal or wooden garage, parking space - 8.9 rubles, reinforced concrete or brick - 12.2 rubles. In cities such as Baranovichi, Bobruisk, Lida, Mozyr, Orsha, Pinsk, the income tax rate is 5.6 and 7.8 rubles. respectively. In cities of regional, district subordination and urban-type settlements, income tax rates for renting out a garage are even lower: 4.4 and 5.6 rubles. respectively.
The notary answers: Is it possible to sell a garage without the consent of the spouse? More details
