Berlin 4-bed: €1,311,000 purchase and €4,670/month rent — sanity check?

[radar.round]

The broker presents this as a roughly 4.3% gross-yield purchase, but I am hesitant to treat that as meaningful without testing the rent and financing. The property is a 4-bed Berlin apartment priced at €1,311,000, with expected rent of €4,670 a month.

Even a modest vacancy period, an insurance increase or higher borrowing cost could remove most of the margin. I am allowing for management, recurring upkeep and a larger repair, but the model may still be optimistic if the €4,670 cannot be achieved or maintained under the rental arrangements. The building looks sound, although shared works and non-recoverable owner costs are still unclear.

Would you first verify whether that rent is current, achievable and stated on the right basis, or concentrate on the building accounts and likely capital work? I plan to rerun the figures with vacancy and more expensive debt rather than choosing a target net yield from the broker’s headline.

 

[sasha.river]

The first thing I’d clarify is whether €4,670 is the current rent or a projection, and whether it is cold rent or includes tenant-paid costs. Without that, the 4.3% headline is not very informative.

I’d pay particular attention to the owner’s non-recoverable building costs and any upcoming shared works. Also calculate yield on your total acquisition cost, not just €1,311,000. At this gross level, financing terms could turn modest cash flow negative quite quickly.

 

[sketchTheCrane]

I wouldn’t choose a target net yield until the rent assumption is proven. Tenant turnover may create vacancy and refurbishment costs, but it does not necessarily mean you can reset the rent to whatever the model assumes.

Run three versions: current rent with normal costs, a vacancy/repair year, and higher financing costs if debt is involved. Include insurance, property tax, management and the non-recoverable share of building expenses separately. If the deal only works in the optimistic version, 4.3% gross is too thin for me.