If the local costs are wrong, the apparent 6.6% gross yield could shrink quickly. The property is a 4-bed detached home in Milan priced at €1,182,000, with projected rent of €6,524 a month.
The house seems sound, although insurance could be a larger expense than expected. My base case deducts an allowance for empty periods, letting or management, ordinary upkeep and a separate repair contingency, with no price growth assumed.
Before deciding what net return is acceptable, I want to verify the local property-tax position, realistic insurance, management charges and the cost of changing tenants. Which of those is most often understated in Milan? I’d also test a longer vacancy and higher financing costs rather than treating €6,524 as uninterrupted income.
The house seems sound, although insurance could be a larger expense than expected. My base case deducts an allowance for empty periods, letting or management, ordinary upkeep and a separate repair contingency, with no price growth assumed.
Before deciding what net return is acceptable, I want to verify the local property-tax position, realistic insurance, management charges and the cost of changing tenants. Which of those is most often understated in Milan? I’d also test a longer vacancy and higher financing costs rather than treating €6,524 as uninterrupted income.