The “Standard Leaseback” program offered by Mini Condos is a guaranteed rental return scheme designed for investors looking for regular passive income.
Here is a breakdown of how the standard program works:
🏠 Program Overview
The Standard Leaseback allows you to purchase a property and immediately lease it back to us, the developer (Mini Condos / Rentals Montenegro) for a fixed period (3 to 10 years). In exchange, we guarantee you a fixed annual return, paid out monthly, regardless of whether the unit is occupied or empty (or even built, if purchased off-plan).
💰 Key Financial Details
-
Rental Rate: The guaranteed rental income is typically 4% of the property’s purchase price annually.
-
Payment Schedule: this rent is paid monthly (or sometimes quarterly), providing a steady cash flow stream.
-
Early Start: A unique feature of this program is that rental payments can begin during the construction phase.
-
If you pay 100% cash upfront, you start receiving rent immediately, even before the building is finished.
-
If you pay in installments, rent payments typically begin once you have paid at least 70% of the total price.
-
-
A frame home in Kolasin Montenegro Example (Hypothetical):
-
Property Price: €175,000
-
Annual Return (4%): €7,000
-
Monthly Income: €583 per month
-
✨ Benefits for the Buyer
-
Consistent Cash Flow: It provides a predictable monthly income, making it similar to a financial product or annuity.
-
Zero Vacancy Risk: You are paid the fixed rate even if the apartment is empty or if the tourism season is slow. The developer absorbs all vacancy risks.
-
Fully Managed: The developer handles all tenant sourcing, check-ins, and maintenance issues. You do not need to manage the property yourself.
-
Furniture Included: The program often requires or includes a specific furniture package, which is provided with a 30 to 100% discount depending on the duration of the Leaseback contract, as part of the deal.
⚠️ Important Conditions and Notes
-
Contract Term: The agreement usually runs for a period of 3 to 10 years.
-
Owner Costs:
-
Included: The developer typically covers the rental income tax and minor maintenance associated with tenants.
-
Excluded: You are responsible for the Annual Property Tax and Condominium (HOA) charges.
-
-
Personal Use: Generally, the property is fully leased to the operator, meaning you normally do not have free personal use of the unit during the contract term. There are exceptions though, so please check check with us. You regain full usage rights after the contract expires.
-
Exit Penalties: If you wish to cancel the contract early (e.g., to sell the unit without the lease), penalties usually apply. This is often calculated as the rental amount for the remaining minimum term plus a percentage of the extended term.
Get in touch today to receive more information about our Leaseback Programs.
Note: we also offers a variation of this called the Leaseback – Cashback program, which allows you to take all these future rental payments as a single upfront discount on the purchase price instead of monthly payments.
