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RENTAL HOUSING COMPLEX IN UNIVERSITY DISTRICT

Bedarf:2 508.39€
Min.:0.00€
Zinssatz:21%
Zeitraum:12 Monate
Ziel: 55 000€
Mindest. Ziel: 35 000€
Öffnet: 2021/09/01
Läuft ab: 2021/10/01
Art: Real Estate
Lage: Latvia
Investitionen: 374

CROWDESTOR community is offered to invest in the development of a rental housing complex in the university district of Riga. The investment target for this round is 55 000 EUR, and the interest rate is 21% p.a. The principal and the interest are repaid in a bullet payment at the end of the 12-month loan term. The loan is to be secured by a commercial pledge on 25% of the Borrower’s company shares and the first-hand mortgage valued at 77 000 EUR. Documents necessary for the registration of the pledge in the public registry are signed. The registration of the mortgage and the pledge is in process.

The raised funds will be used to develop the first of thirty 35m2 houses in a rental housing complex. Every house will be fully furnished, equipped with a kitchen and a bathroom. The location is the best fit for the students as the most prominent universities of Riga are within 5-15 min walking distance from the housing complex. 

The Borrower intends to capitalize on the increasing number of international students coming to Latvia. Every year around 30 000  students enter Latvian universities and college programs, and 15-20% come from abroad.  Additionally, over 70% of Latvian students come from the regions, and all of them need accommodation for the next 3-5 years, which boosts the demand for student housing even further.  

The houses will be rented for 480 EUR per month, which is a unique offer, considering the average price of a 1-bedroom apartment in the city center is estimated at 445 EUR. Additionally, the houses will be highly energy-efficient and have a terrace, which gives the Borrowers a competitive advantage over other student housing providers in Riga. 

LOAN

Target: 55 000 EUR  
Minimum target: 35 000 EUR
Loan term: 12 months
Interest rate: 21%  p.a.
The Borrower and project developer: SIA Easy Living
Repayment:

The interest and the loan principal are paid in a bullet payment at the end of the Loan term.

Security:

1) Commercial pledge on 25% of the Borrower’s company shares;

2) First-hand mortgage valued at 77 000 EUR.

Documents necessary for the registration of the pledge in the public registry are signed, registration is in the process. The registration of the mortgage is in process.

Location: Latvia

MARKET OPPORTUNITY

While most Latvian universities and colleges are located in Riga, the students predominantly come from the regions of Latvia and overseas. From 27 000 - 28 000 students enrolling in universities every year up to 5 000 are coming from overseas and around 20 000 from the regions of Latvia. 

This situation creates a demand for a particular kind of housing, fitting the student budget and lifestyle. While some of the demand is covered by university dormitories, a significant part of students choose to rent apartments on their own due to the limited comfort and location options a dormitory can provide. 

The universities are marked with red pointers, and the Borrowers student housing complex is marked with a house icon.

The Borrowers student housing complex is close to the city center and within walking distance from the most prominent universities.

Distances

  • Faculty of Biology of the University of Latvia - 400m (5-minute walk);
  • Faculty of Medicine of the University of Latvia - 350m (4-minute walk);
  • Faculty of Geography and Earth sciences of the University of Latvia - 600m (7-minute walk)
  • The "RISEBA" University of Business, Arts and Technology - 2.2 km (28-minute walk);
  • RTU Faculty of Engineering Economics and Management of Riga Technical University - 2.3 km (29-minute walk); 
  • Riga Technical University - 2.1 km (26-minute walk); 
  • Pauls Stradiņš Clinical University Hospital - 2.7 km (20-minute public transport ride); 
  • Turiba University - 3.1 km (17-minute public transport ride);
  • Riga Stradins University - 4.6 km (30-minute public transport ride). 

THE PROJECT

The Borrower intends to build thirty fully furnished 35m2 wood houses with bathrooms and kitchens. Additionally, every house will have a parking space and terrace, which is not typical for the accommodation options at a price of ~480 EUR.

However, the key competitive advantage of the project is high energy efficiency and low utility costs at a level of 40-50 EUR throughout the year. The houses will be heated with a heat pump, which will act as an air conditioner during the summer, and air conditioning is still considered a luxury for rented apartments in Riga. 

Additionally, the territory of the housing complex will be landscaped and equipped with recreational areas like barbeque spots. 

The Borrower estimates the annual income at 192 000 EUR, assuming the housing complex is 90% occupied. Additional income can be generated through short-term rent on Airbnb and Booking.com, as occupancy may lower during the summer. 

Each house can be built within two months, and the Borrower intends to build four houses simultaneously. This way, thirty houses will be ready for rent in less than one year. 

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