With NOVA, investors can choose from a variety of different real estate investment properties. Each property project has a different duration, ROI, annual returns, location, etc. One of the most important differences between NOVA’s properties is an investment strategy. This article will help you better understand what the Long-Term Rent strategy entails and how to make a profitable rental property investment with NOVA.

What is an investment strategy?

Each investor seeking how to invest in real estate has different goals and capabilities. Some buy a residential property and rent it out, making money from steady rental property investment. Others may purchase a fixer-upper to sell it later for a considerably larger amount. Another widespread approach is getting a house in a popular vacation destination and renting it to tourists for a short time for a higher price.

All these approaches to real estate property investments are called investment strategies. They allow potential investors to choose multiple ways of making money from the property market. 

Long-Term Rent: A detailed overview

The Long-Term Rent strategy developed by NOVA is a perfect choice for anyone who is considering rental property investment. It allows investors to profit from real estate value growth and receive consistent returns from rental income. Let’s explore how this strategy works in more detail.

  • Stability. The main advantage of the Long-Term Rent strategy is the duration and stability of the rent contract. Tenants seeking residential properties tend to look for a long-term commitment. They often sign a lease for several years at a time. This ensures consistent income and, consequently, an uninterrupted flow of rental dividends to investors following the strategy.
  • Property type. Long-Term Rent projects are properties that can be rented out for a long period of time. Generally, this includes residential houses, apartments, commercial premises, etc. A property needs to be attractive to potential tenants or renters in order to ensure a long-term lease.
  • Return on investment (ROI). ROI refers to a forecasted rate of investment returns for the whole duration of the property project. When you browse through available properties on NOVA, you can see the total expected ROI for each of them. It includes all profits made from a property, both from property appreciation and from rental income.
  • Types of dividends. With Long-Term Rent, investors have two avenues to earn money: property appreciation and rental dividends. 
  • Payout period. Property appreciation dividends are paid out at the end of the property project. But before that, investors receive rental dividends every 3 months throughout the entire duration of the investment project.
  • Dividend amount. Long-Term Rent offers two types of dividend income. The monetary amount of dividends also depends on various factors. However, it may be affected if a property stays vacant at some point during the project’s life.
  • Expenses. NOVA and its real estate partners take care of all expenses associated with the property, so investors following the Long-Term Rent strategy don’t need to worry about them. When an investment property is rented out, NOVA may charge service and property management commissions from your rental dividends. However, if a property is vacant, the property management fee will not be deducted. The government can also impose a separate tax on entities generating income. At the end of the project, your NOVA also deducts an appreciation fee from property appreciation dividends. 
  • Project duration. Even the name “Long-Term Rent” indicates that this strategy covers projects that can last for several years. The current NOVA rental projects have a duration of 2–3 years, but others may take more time.

These are the main characteristics of the Long-Term Rent strategy. Now, let’s learn about the stages each property project goes through.

Long-Tern Rent: Key stages of an investment project

NOVA projects that belong to the Long-Term Rent strategy go through 3 main stages:

  1. Token sale. At this stage, the property tokens are available for sale. Anyone willing to try tokenized real estate can buy tokens and secure their right to future profit.
  2. Dividend period. After the token sellout, the property becomes funded. At this point, you can no longer invest in this property. Once the property is rented out, investors can expect their first rental dividends to arrive every 3 months.
  3. End of the project. When the duration of the project is over, investors will receive final dividends for property appreciation and their invested funds back.

JVC 11: A case study

JVC 11 is the current project led by NOVA. With a duration of 3 years, it follows the Long-Term Rent strategy and has already entered the dividend period.

JVC 11 is a 1-bedroom apartment located in one of the most popular residential districts of Dubai. Because of this, it is a highly attractive option for people looking for a peaceful place to settle down in. All JVC 11 tokens have already been sold out, and the apartment is already rented out.

As the first tenants already moved in, the investors will get their first rental dividends in August and continue receiving regular payments every quarter (3 months). At the end of the project, JVC 11 token holders will also receive profit from property appreciation.

The initial property price of JVC 11 was $240,000, which included the property acquisition cost and additional expenses spent on legal support and tokenization of the apartment (check your Supplemental Offering Agreement for more details). Considering the duration of the project, the estimated ROI reaches 55.80%.

According to the forecasted earnings proportions, about half of these returns will be paid out as rental dividends while the other half is property appreciation. With the price of one token being $48, JVC 11 investors may expect a profit of around $27 before fees! Compared to other financial markets, JVC 11 is showing a great outlook, considering the Dubai real estate market is expected to grow significantly in the following years.

Make your first rental property investment now!

With NOVA, you can buy property tokens without worrying about payment system commissions — we will cover them for you! Start making money from the Long-Term Rent strategy with our new JVC 12 project. Buy your first token for only $38 and ensure consistent returns for the next 2 years. Download the app now 🍀

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