I’ve checked the basic rent calculation, but I’m still not confident that I have captured the full cost of owning this property. It is a 5-bed coastal home in Paris priced at €1,325,000, with projected rent of €4,712 a month. The resulting gross yield is roughly 4.3%.
The cash-flow model includes empty periods, management charges, ordinary upkeep and money set aside for a substantial repair. The building looks sound, although a difficult tenant changeover or an extended gap between tenancies would quickly expose the thin margin. I still have to test the figures against insurance, property tax and different financing rates.
Which recurring Paris expense is most often missed in an initial calculation like this? Before debt costs, what net yield would make the maintenance burden and letting risk acceptable to you?
The cash-flow model includes empty periods, management charges, ordinary upkeep and money set aside for a substantial repair. The building looks sound, although a difficult tenant changeover or an extended gap between tenancies would quickly expose the thin margin. I still have to test the figures against insurance, property tax and different financing rates.
Which recurring Paris expense is most often missed in an initial calculation like this? Before debt costs, what net yield would make the maintenance burden and letting risk acceptable to you?