Serviced apartment boom: how investors earn up to 11% annually
The short-term rental market in Ukraine is experiencing a true renaissance. According to LUN data, by the end of 2025, the country already had 105 income-generating real estate projects, with serviced apartments demonstrating the most rapid growth. The secret to success lies in the synergy between developers and professional hoteliers, who create ready-made business models for investors. Entry into this business ranges from $40,000 to $80,000 for a standard room, while premium lots can cost over $100,000.
Experts at Ribas Group note that the financial model of such projects shows high efficiency. At the launch stage, during the first 1–3 years of operation, when the property builds a guest base and fine-tunes operational processes, the average currency return is 5–7% annually. However, from the third year, provided operations are streamlined, profits can rise to 9–11% annually. It is important to note that operating profit is distributed on an 80/20 basis, where 20% is the management company's commission for professional business management.
Economic advantage: why serviced apartments beat the classics
Comparative analysis shows that serviced apartments have a significant advantage over classic rental housing. With the same location and property class, serviced apartments pay off 3–6 years faster. This is achieved through higher occupancy rates and pricing flexibility. The gross return on serviced apartments exceeds classic rental indicators by 4–8%, while net marginality is higher by 1–4%. This makes the serviced apartment format attractive to investors seeking quick payback and high asset liquidity.
Rental buildings: a perspective squeezed by the lack of state support
While serviced apartments are flourishing, the segment of urban rental buildings, which could solve the affordable housing problem, is developing extremely slowly. According to LUN analysts, it is premature to call this sector actively growing. Co-owner of Standard One, Alexander Ovcharenko, points to fundamental economic barriers: a rental building pays off through rent over 10–15 years or more, not counting the construction cycle, which takes another 5–7 years. Such long investment horizons require stability, which is currently lacking.
Barriers to entry: loans, taxes, and the need for PPP
The main brake on the mass construction of rental buildings is the lack of cheap long-term loans for 15–20 years and project financing. Additionally, a critically important factor is the instability of tax legislation. Developers are ready to invest in long-term projects only on the condition that tax rules are fixed for the entire investment cycle. Alexander Ovcharenko proposes a solution through public-private partnership: cities could provide land on preferential lease terms and connect utilities, while developers could transfer 20–30% of apartments for affordable or social rent. Without such measures, rental buildings will remain a niche product for a narrow circle of investors.
