Paris 3-bed duplex at €1,279,000 and €9,243/month — does the yield hold up?

L

LocalEcho

Landlord
€9,243 a month against a €1,279,000 purchase price gives this 3-bed Paris duplex an attractive 8.7% gross yield, but only if that proposed rent is both lawful and realistic. That is the part of the calculation I trust least.

I have allowed for vacancy, management, ordinary upkeep and a separate repair buffer. Financing costs could also change the result sharply, and this would be our first rental. Which owner-only charges or building costs are commonly overlooked in Paris, and how much margin would you want after all of them?
 
One clarification: the €9,243 is an expected rent, not income from an existing lease. I therefore need to establish how much is base rent versus any recoverable charges, and whether the figure is actually permissible and supportable for this particular duplex. I’m treating the 8.7% as an initial screening number, not a result I can rely on.
 
The gross-yield arithmetic works: €9,243 multiplied by 12 is €110,916, or about 8.7% of €1,279,000. The weak link is clearly the rent assumption.

Before discussing net yield, ask for the floor area, furnished or unfurnished basis, charge breakdown and the justification for that rent under the rules applying to the property. Also obtain the property-tax figure and several years of co-ownership charges, separating recoverable from owner-only costs.
 
I wouldn’t assume the largest surprise will be property tax. For a duplex, co-ownership works and tenant turnover could do more damage to the model, particularly if the management allowance excludes reletting, inspections or administration between tenants. “The building looks sound” is not the same as seeing meeting records, past expenditure and proposed works.
 
Also check exactly what the management quote covers. A low headline percentage can sit alongside separate letting and turnover charges. Insurance needs its own line too, rather than being buried inside a general maintenance allowance. I would model one ordinary year and one bad year instead of smoothing every cost into a single average.
 
What are the financing assumptions? A respectable unlevered yield can still produce weak cash flow if the borrowing cost, repayment schedule or refinancing terms move against you. Run the deal all-cash first, including purchase costs in the capital committed, then add the proposed debt separately. Personally, I would want a conservative pre-tax, pre-finance net yield around 5% or better here, not merely a positive number.
 
The tenant pool at €9,243/month matters as much as the average vacancy percentage. Stress the model with a longer gap after each departure, fresh marketing or management charges, and some work before reletting. I’d also want several genuinely comparable rents, not only an agent’s projection. If the regulated or market-supported rent is lower, the apparent bargain can disappear quickly.
 
My order would be: verify the legally achievable base rent, confirm what charges are recoverable, inspect co-ownership records and planned works, obtain actual property-tax and insurance figures, then rerun cash flow with lower rent and longer vacancy. Only after that would I choose a required yield. At 8.7% gross in Paris, I would treat the unusually strong number as something to explain rather than as a margin of safety.
 
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