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Apartment leasing – what is that? – Mortgage Loan



Apartment leasing is not very popular in Poland, especially since the demand for apartments in our country is constantly growing, which is not optimistic for buyers. Big interest means higher prices.

However, this boom must end, and then developers may have some problems selling their premises. Will the apartment leasing service enter our market then? Check what is worth knowing about her.

What is flat leasing?

What is flat leasing?

The leasing of an apartment is similar to a long-term rental, with the difference that after a set period of time the apartment becomes the property of the lessor. How does it work and why introduce this type of service when you can use a mortgage? Apartment leasing works practically on the same principle as car leasing.

In practice, this means that the lessee pays monthly installments, in the same way as when he regulates the rent. After paying off the leasing installments, the apartment becomes his property. By design, it is, therefore, a long-term service, which can last up to several years. The procedure is as follows: the client chooses an apartment and submits the leasing application.

When he receives the consent of a bank or financial institution, he can treat the apartment as if it were his, although, in reality, it belongs to the financing entity, i.e. the lessor. The contract is signed for a definite period. The tenant pays rent (higher than standard), which is intended to cover the price of the property.

The interested person will become the owner of the four corners only after full repayment of installments. Then he has, according to the entries in the land and mortgage register and leasing contract, the right to transfer ownership of the premises to himself. It is also possible to lease an apartment for a company. For now, this option is not available in Poland.

Leasing for an apartment – how does it look in practice?

Leasing for an apartment - how does it look in practice?

Are you wondering how to rent a flat? The procedure is relatively simple. Those interested in this financing option choose the apartment themselves and then submit the relevant application. If leasing for an apartment is granted, then the lessee may treat the premises as their own, but in legal terms, he does not become its owner.

The flat belongs to the financing entity with which the lessee concludes a fixed-term contract. The tenant’s obligation is to pay the rent on time, the amount of which is higher than the standard one. When all installments are repaid, the ownership of the apartment will be transferred to the lessee.

Can I take a lease for an apartment in Poland? Unfortunately, this option is currently not available.

Who is the apartment leasing for?

Who is the apartment leasing for?

Leasing an apartment is a chance to finance the purchase of your dream m4 for people who do not have the chance to grant a typical mortgage. And precisely because it is an alternative solution, its price will turn out to be much higher.

In addition, flat leasing does not require the payment of its own contribution at the level currently set by the bank of 20%.

Apartment leasing is tax advantageous. It is possible to reduce the tax base. In addition, operating leasing provides the opportunity to include most of the expenses incurred (initial fee, leasing installments, running costs) as costs. Financial leasing allows you to deduct depreciation and interest parts of installments.

Apartment leasing versus mortgage – what pays off?

A mortgage is cheaper than leasing a flat, and hence a more profitable solution in financial terms. However, it is worth knowing that in the case of housing leasing it becomes possible to deduct the costs of finishing, renovation, and even equipment.

Furthermore, leasing has no effect on creditworthiness. So if in the near future you are considering incurring another commitment, e.g. a mortgage for the purchase of a second apartment that you want to spend on investment, then you get this opportunity.

You must know that leasing also requires a down payment, although it is slightly lower than what the bank requires. It usually fluctuates around 10-15%. Which will also be the waiting time for the decision – about 3 business days.

Apartment leasing in Poland – is it possible?

Apartment leasing in Poland - is it possible?

Apartment leasing in Poland is not a popular solution. It is currently very difficult to find a favorable offer of this kind. To a large extent, this is due to the Polish mentality.

Poles are reluctant to pay for something that is not their property, and show a very high interest in mortgage loans and are able to postpone long years and even borrow to collect funds for a 20% own contribution.

All this means that it is not profitable for developers to make leased apartments available. They can earn a lot easier and faster when selling the premises. Currently, the housing market is constantly rising, prices are rising and more prestigious investments appear. Therefore, it seems that the mortgage will still be the solution chosen much more often than apartment leasing.

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