We present an article analyzing the apartment rental situation in Central Riga.
The pandemic has changed demand and altered tenant preferences.
Due to the decline in tourist flow, many apartments have been converted to long-term rentals. There is even an oversupply of compact apartments in the Center.
A couple of years ago, quality properties in Central Riga were rented out within one to two weeks. Now, potential tenants are not in a hurry-they select options and request discounts. This affects the rental timeframe.
An important factor is the decrease in visiting students. Previously, they would share large apartments in Central Riga. Such apartments, ranging from 100-120 sq.m., are now difficult to rent. Moreover, this segment is unattractive for local residents. Rental costs have also decreased-from 1400 euros (on average) to 1000 euros.
However, for large apartments, much depends on the layout. As remote work becomes increasingly popular, the presence of a separate office or workspace increases the property's attractiveness.
Tenant preferences have also changed. If the apartment was renovated more than ten years ago, it will be difficult to rent. Tenants carefully examine utility costs. In older buildings with outdated utilities, operating expenses will be higher than in renovated buildings.
Given the uncertainty (due to the pandemic), tenants budget their finances so that rental expenses do not exceed 35-40% of total income.
Thus, if multiple negative factors coincide (old building, high utility costs, large area), such an apartment will be difficult to rent.
Conversely-if it's a renovated building, with efficient operating costs and convenient layout, this is in demand!
Regarding rental rates for modern and quality properties in the Center, these are approximately 15 euros per square meter per month (for apartments up to 40 sq.m.), and 10 euros per square meter for larger apartments.
Luxury apartments are few in supply (most often they are offered for sale or remain vacant as investment properties, where condition should not deteriorate). In Central Riga, only a handful of buildings meet high standards (prestigious location, beautiful façade and entrance, concierge, high-quality finishes). Here, rates start from 20 euros per square meter per month.
What are the conclusions?
From a rental perspective, it is not recommended to purchase and rent out large apartments in Central Riga. The return on investment will not be high. A more rational option is small apartments in renovated buildings on the periphery of the Center, or apartments in renovated buildings in areas located 10-15 minutes' drive from the Center (for example, Agenskalni).
Based on our company's experience, apartments in Central Riga can be purchased for savings purposes. For example, one of our clients purchased an apartment with a panoramic view of Old Riga. Obviously, this is a unique property with no analogues, and it will always be in demand.
Source:
https://www.varianti.lv/ru/novosty-i-analytika/7077-nizhe,-chem-do-pandemii
If you wish to purchase any good real estate property, if individual approach is important to you, if you want to communicate with a realtor and lawyer in your native language, then contact our company KOM-INVEST! We will be happy to find a suitable property, answer all your questions, draw attention to essential details, arrange the transaction, process your residence permit while the program is still active, and manage your property.
For more detailed information on obtaining a residence permit in Latvia, see here in different sections.
Have questions? We await your email or call!
Phone number: +371 29774775 (Viber, WhatsApp)
Email: info@kominvest.com