To take or not to take: is it worth buying an apartment in the face of rising mortgage prices?

What to say the law

The law does not directly prohibit renting out an apartment with a mortgage. Those. Specifically, the law on mortgages does not indicate that an apartment taken on a mortgage cannot be rented out. Moreover, there is even a type of mortgage – commercial. It is given by individual entrepreneurs and LLCs. Premises purchased with a commercial mortgage can (and should) be used to make a profit, including for organizing trade, running a business, or renting out for an office/warehouse/shop.

What about the “civil” mortgage, which is issued to an individual?

There is no direct prohibition in the law, but the contract usually states whether the mortgaged apartment can be rented out to third parties or not.

The fact is that with a mortgage, the apartment is pledged to the bank, so the bank (lender) is interested in ensuring that the premises are safe and sound. If the owner rents out the apartment to an unknown person and on unknown terms, then the safety of the premises is not guaranteed.

You can include a clause in the mortgage agreement allowing the owner to rent out the mortgaged apartment, but then the bank will most likely offer you to register as an individual entrepreneur and officially rent out the apartment, paying taxes. And the mortgage will be issued by a commercial one.

But it's up to you to agree. You can also rent out an apartment with a regular mortgage - if the bank allows it.

If housing was purchased with the help of maternal capital, then it should be used for personal residence. Therefore, such an apartment cannot be rented out. If you send a request to the bank, it will not allow it.

Renting an apartment purchased without a down payment

Many people are interested in whether it is possible to rent out a mortgaged apartment purchased with a mortgage from Sberbank or another banking institution, if no down payment has been made. You should know that Federal legislation allows you to rent out a mortgaged apartment using any legal scheme. Since it is possible to buy an apartment with a mortgage without a down payment, this means that renting out an apartment on such mortgage terms is a completely legal operation. But at the same time, according to the reference in the current law, the mortgagor does not have the right to receive income from real estate if this is prohibited in the terms of the mortgage agreement.

Thus, the law contains direct information about whether it is possible to rent out an apartment purchased with a mortgage with or without a down payment. That is, the answer is yes and the premises can be rented out. The main thing is that the mortgage agreement does not contain any restrictive conditions. In this case, the terms of the lease agreement can be negotiated with the tenant in any order.

There are no regulatory requirements regarding the execution of a lease agreement for such cases. A standard agreement is quite suitable, but it is also possible to use your own version, previously agreed upon with the bank.

Is it possible to take it unofficially?

Many people have a question: is it possible to rent out a mortgaged apartment unofficially? After all, bank representatives will not go to all the apartments and check whether the owners live there. This is generally illegal - except for the authorities, no one can oblige residents to show documents for the apartment.

Therefore, quite a lot of people rent out their apartments purchased with a mortgage unofficially. Many residents do not even know that they live in a mortgaged building.

What will happen if such a setup is revealed:

• the lease agreement will be terminated, and the tenants illegally occupying the premises will be evicted, and the owner will have to return their money;
• the owner will be forced to calculate illegally obtained income, declare it and pay tax + fine;
• the bank may demand early repayment of the mortgage due to violations of the terms of the contract.

And here’s another interesting article: Conditions for refinancing a loan in Uralsib: how to get a rate of 11.9%

Thus, it is better not to run into trouble, but to ask the bank to allow you to officially rent out the apartment. Yes, you may have to incur additional expenses in the form of registering an individual entrepreneur and obtaining a commercial mortgage (the rate for it is slightly higher than for a regular one), but if you are going to make renting out an apartment your business, it is better to do everything according to the law.

Materiel: is it profitable to rent?

Now let’s calculate how profitable it is to rent out an apartment with a mortgage and what needs to be taken into account.

Let's take, for example, a one-room apartment in Moscow with an area of ​​approximately 40-45 square meters, resale, from the owner. The cheapest options, according to the Cian website, start at around 2.75-3.5 million rubles. Let there be 3 million rubles for a convenient account.

Let's say a certain Vasya has 750 thousand rubles for a down payment (this is 25% of the cost of housing). It’s quite enough to get a mortgage from Sberbank. In this case, the mortgage parameters will be as follows:

• loan amount – 2,250,000 rubles;
• rate – 9.8%;
• payment – ​​23,905 rubles.

You can rent out such an apartment in Moscow for at least 20-25 thousand rubles, and if you try (furnish it properly, redo “grandmother’s renovation” to look like Euro or high-tech, drag in a microwave and run the washing machine in the right direction according to Feng Shui), then for 30. Let there be these same 30 thousand.

What are the costs? A mortgage is understandable, here we pay 23.9 thousand rubles. Other expenses are utilities + taxes (we are honest landlords).

Utility costs are already included in the rent, i.e. the tenant does not pay for them, so they fall on the shoulders of the owner. Let a communal apartment in a Moscow one-room apartment cost 5 thousand rubles (for good measure). Meters are paid separately, they will be paid by residents, so we do not take them into account.

Now the tax. Profit from renting out – 30 thousand. We subtract 5 thousand - the cost of maintaining the apartment. What remains is net profit - 25 thousand. Tax – 13% of this amount, i.e. 3250 rubles.

Total expenses:

• mortgage – 23,900 rubles;
• communal apartment - 5000 rubles;
• taxes – 3250 rubles.

Total: 32150 rubles.

From 2021, you can register as a self-employed person and rent out an apartment paying a lower tax - 4% if renting out housing to an individual and 6% if renting out to a legal entity. Let's assume that you rent out an apartment to another person (individual) and pay a tax of 4%.

And here’s another interesting article: What is passive income and how to really get it

But the tax will have to be paid not on net profit (i.e. income minus expenses), but on all profit, i.e. from 30,000 rubles. At a rate of 4%, the tax will be 1200 rubles, and the total expenses will be 30100 rubles (savings 2050 rubles).

Obviously, renting out such housing for 30 thousand is unprofitable. You need to ask for at least 33 thousand, or better yet 35 thousand, in order to be able to pay for unplanned expenses (repairs, painting, purchase of equipment, etc.).

And so the same CIAN shows that such prices exist. And I would not say that such apartments shine with renovation or unique location.

Conclusion: first calculate the costs, and then plan how and at what price to rent out a mortgaged apartment.

Naturally, each city and even a separate region of Moscow will have its own prices - I just gave an example of how an investor should think.

Additionally, you need to include expenses for individual entrepreneurs if you take out a commercial mortgage. Therefore, you either need to raise the rent or look for an option with a cheaper mortgage.

By the way, if you don’t know where to get a down payment for a mortgage and you have a small salary, then read this article.

Is it worth taking out a mortgage if it is ultimately unprofitable?

So, we found out whether it is possible to rent out an apartment with a mortgage (for those who do not understand or have forgotten: it is possible) and how to calculate whether renting is profitable. If it’s profitable, it’s worth taking out a mortgage. What if it’s not profitable? What if expenses exceed income?

Here are some arguments in favor:

• the apartment will still remain yours, and you can monetize it in any other way, for example, by remodeling it and selling it at a higher price;
• The mortgage payment will remain the same, but the cost of housing and the amount of rent will increase - discount the cash flows and find the break-even point;
• after paying off the mortgage, renting out will begin to generate a stable income;
• If you are buying an apartment for yourself, but temporarily cannot pay the mortgage in full, then renting it out can be a good way to save money and build your financial safety net.

And here’s another interesting article: How to save up for an apartment, even if you have a small salary

In the end, you can use a more aggressive method of renting out: rent out housing daily or monthly during sessions / for business travelers, you can divide the premises into two parts and rent out each separately, you can, on the contrary, make an elite renovation and rent out the apartment at exorbitant prices. something for the majors.

Arguments against":

• you will have to pay extra for the apartment, i.e. it will not be an asset, but a liability;
• you need to incur additional expenses: pay rent and taxes;
• after some residents will have to spend money on repairs;
• if you take it unofficially, it is fraught with unpleasant consequences;
• you may not be able to find tenants, and as a result, the living space will be idle;
• tenants may unexpectedly move out, damage the property, or particularly cunning ones may sublet the property or try to cheat in another way (for example, try to sell the apartment by posing as the owners);
• the price of real estate, and therefore rent, may fall.

Thus, you can rent out an apartment with a mortgage - both officially and unofficially (and it is better officially). But whether it is profitable or not - you need to consider it. If it is profitable and you receive income or have found a balance point, then you can make renting out an apartment your business. If not, think about it: in some cases, taking out a mortgage and renting it out is still profitable. Good luck, and may the money be with you!

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Mortgage calculation in SberBank

Mortgage loan parameters:

• term – 20 years
• down payment – ​​20% of the cost of the apartment

It is worth considering that for certain categories of borrowers, most banks have preferential lending conditions that allow you to take out a mortgage at a reduced interest rate.
The cost of the apartment depending on the region

Theoretically, you can use mortgage real estate to make a profit and pay off monthly loan payments in several regions, including Moscow, Yekaterinburg, Kazan, Chelyabinsk, Omsk and Rostov-on-Don. It should be taken into account that the presented data are averaged.