Ronson Development kicks off the sales of the second stage of the Miasto Marina aparthotel project in Wrocław
Renting an apartment offers the possibility of earning a yield of nearly 8% per annum. By buying a unit as a company, it is possible to deduct 23% VAT.
Ronson Development has already sold more than 60% of the 95 units offered in the first stage of the Miasto Marina aparthotel complex in Wrocław. The developer has now expanded the sales offering by another 56 units. This project is an excellent proposal for people who want to generate a profit on short and long-term rentals. Buyers can count on generating a rate of return on their capital of nearly 8% with the assistance of a professional rental operator. In addition, by buying an apartment as a company, VAT at the 23% rate is deductible.
The Miasto Marina aparthotel complex consists of five cosy apartment buildings that will house a total of 151 units with a high standard of finishing materials and with a floor area ranging from 23 to 63 m2. “We have already sold 60% of the apartments in the first stage including 95 units. This month we added another 56 apartments from the second stage. The construction of the overall complex will be completed in the spring of next year”, says Justyna Hamrol, regional director of sales and marketing at Ronson Development.
This investment project is located at ul. Na Grobli 20 on the Oder River vis-a-vis the Wrocław University of Science and Technology in the immediate vicinity of venues such as Hydropolis, Hala Stulecia and the zoo. Miasto Marina’s location offers easy access to public institutions, business districts, cultural centers, places of entertainment and the Old Town.
Having a professional operator unburdens the owner
Ronson Development has signed a contract with the company doing business as Ivanishvili from Wrocław to act as the rental operator. It will deal with the layout of the apartments, finishing and outfitting them and it will also manage the rental of the apartments on behalf of their owners. The operator will be responsible, among other things, for technical services, cleaning, reception, security, promotion, etc. “The utilization of the operator’s services is a voluntary option we have created for the convenience of our clients. If they decide to take advantage of this solution, the owners will be relieved of having to handle the daily affairs related to rentals as this professional entity will do that for them”, points out Justyna Hamrol.
Presently, Ivanishvili manages more than 150 hotel apartments and residential units in Wrocław. The units supervised by the company are characterized by their modern design. They are outfitted with electronic locks whereby access is fully automated. The interiors of the apartments in Miasto Marina will be designed in a modern fashion, simultaneously using subdued colors. All these efforts are being taken to satisfy the expectations of the highest number of people.
The buyers of apartments utilizing the rental operator’s services will be able to choose one of three interior layout options specially prepared for this project.
Wrocław is a popular destination among tourists and business guests
The rental offer prepared by Ivanishvili is addressed to three groups of clients. The first target group consists of business clients, i.e. employees of companies during their business travels (the operator has signed contracts with the largest international corporations operating in Wrocław, including Google, Amazon, Ryanair, LG and IBM). The second target group consists of tourists traveling to the capital of Lower Silesia who are looking for short-term lodging through internet platforms such as Booking.com, Hotels.com, HRS, Expedia and Airbnb. The third target group consists of medium and long-term residents, e.g. foreign and domestic contract employees, temporary employees, students from Poland and abroad, as well as temporary residents, e.g. people remodeling their own residences or in the process of moving.
The capital of Lower Silesia is presently one of the most vibrant cities in Poland when it comes to business and tourism. Its high pace of economic growth fosters this position, as does the improvement in transport links to central Poland. After commissioning the S8 expressway, the trip by car from Warsaw to Wrocław has been shortened to a mere three hours. In 2017, more than 2.5 million people visited Wrocław for tourism and business. In 2018 the number of internet inquiries for lodging in Wrocław has shot up by 242% versus the previous year.
Ivanishvili assumes that the occupancy rate of the apartments in Miasto Marina will surpass 75%. It estimates that the investment yield for apartment owners, after covering all the related costs, including the fee paid to the operator, will be 7.84% p.a. Apartment owners will receive an itemized monthly report regarding the rental of their unit in the previous period, after which they will receive the rental fee directly to their bank account.
Fully deductible VAT
An aparthotel investment is especially favorable to businesses that draw rental income, including sole proprietorships. Although it is true that the VAT rate on the purchase of hotel apartments is 23%, as opposed to the 8% rate at which residential units sold by property developers on the primary market are sold, VAT taxpayers have the option to deduct the entire VAT tax.
According to data published by the Finance Ministry, at the end of 2017 there were nearly 13 thousand sole proprietorships in Poland engaged solely in drawing income from rental properties that pay income tax to the tax authority under the flat registered income tax arrangement. In addition, 140 thousand people held rental properties for which they paid tax under the progressive tax brackets. These data highlight the marked growth in the number of people generating short-term rental income (between 2015 and 2017 the number of these taxpayers more than doubled to more than 14 thousand people).