Should you take a mortgage to buy an investment apartment

Introduction

Taking a mortgage to buy an apartment for rent is a common path for investors who want to scale faster. But is it a sensible move in Georgia today? This guide walks through the main pros and cons, what to check, and practical steps to make the decision with confidence.

1. Define your investment goal 🎯

Start with a clear objective: do you seek steady monthly cash flow, seasonal income, or long-term capital appreciation? Your goal determines the acceptable mortgage term, down payment level, and the type of property to target.

2. Rental yield vs mortgage cost 💸

Evaluate rental income net of taxes, management fees, maintenance, and vacancy. Compare that to the total cost of borrowing including interest, bank fees, and insurance. If net rental income covers mortgage payments and leaves a safety margin, the mortgage can work.

3. Market and location matter 🏙️

In Georgia, demand patterns differ by city and segment. Coastal and tourist areas can give higher seasonal income, while city centers and neighbourhoods near universities or offices usually offer stable long-term tenants. Choose location based on your target tenant profile.

4. Key risks to consider ⚠️

• Vacancy periods and seasonal dips
• Unexpected repair and renovation costs
• Legal or regulatory changes affecting landlords
• Currency mismatch if loans and incomes are in different currencies
  Plan stress tests for worst-case scenarios and keep a cash reserve.

5. Mortgage type and terms 🧾

Decide between fixed or floating interest, length of loan, and the size of the down payment. For investment properties, a larger initial payment and a buffer are often recommended to lower monthly burden and reduce default risk.

6. Alternatives to full mortgage financing 🔄

If a full mortgage feels risky, alternatives include:

• Paying cash or a larger down payment
• Combining cash with a small mortgage
• Joining a co-investor
• Investing in property funds or REIT-like vehicles
  These options vary in control, liquidity, and risk exposure.

7. Taxes and legal checks in Georgia 📑

Investigate tax rules for rental income and ownership, especially for nonresidents. Always run a full legal check: titles, encumbrances, correct property boundaries, and documentation completeness.

8. Practical purchasing checklist ✅

1. Build a conservative cash flow model including reserves.
2. Shortlist properties by expected net yield and liquidity.
3. Obtain mortgage pre-approval from lenders.
4. Perform due diligence and legal checks.
5. Arrange property management or prepare for direct management.

9. How BuyHome can help 🤝

BuyHome supports investors with market analysis, property selection, legal verification, and connections to mortgage specialists. Start your search at https://buyhome.ge/en and get tailored advice at https://buyhome.ge/en/search.

Conclusion

A mortgage can accelerate portfolio growth and improve returns when structured carefully and supported by a realistic plan. It is not risk-free, so build reserves and run stress scenarios. If you want help assessing a specific property or mortgage scenario, contact us — we will help you model outcomes and find properties that fit your goals.