Warsaw 3-bed duplex: does PLN 10,460 rent justify PLN 2.35m?

kian_roofs

Landlord
Established
The gross return makes a reasonable case for the property, but I am not yet convinced it survives the less visible costs. This is a Warsaw 3-bed duplex priced at PLN 2,350,000, with projected rent of PLN 10,460 a month and a gross yield near 5.3%.

My next step is to establish whether that rent is the landlord’s base income or includes building charges. I also need firm figures for management, insurance, property tax, ordinary maintenance and the clustered costs that can follow tenant turnover. If the supported rent and an unlevered cash-flow calculation still hold up, I would negotiate; if not, I would walk away. What net return would you require after proper allowances?
 
The gross calculation works: annual rent is PLN 125,520, which is about 5.3% of the price. My first concern would be whether PLN 10,460 is base rent received by the landlord or the tenant’s total monthly payment including building charges and utilities. That distinction could materially reduce income. Personally, I would want the properly reserved, unlevered net yield above 4% here.
 
How was the expected rent established—an existing lease, comparable signed rents, or an asking figure? A small difference between advertised and achievable rent matters at this purchase price. I’d also model tenant turnover separately from ordinary vacancy because reletting, cleaning and minor refurbishment can arrive together rather than as smooth annual costs.
 
I’m less convinced vacancy is automatically the main weakness. If the location and layout support the rent, a well-priced 3-bed may remain occupied. The greater danger could be treating the larger repair reserve as a one-off event when appliances, finishes and duplex-specific components age on different schedules. I’d ask for a breakdown of what the building charges cover before adding or removing anything from the model.
 
Run the deal as annual cash flow rather than starting from 5.3%: PLN 125,520 income, then subtract landlord-paid building costs, management, insurance, property tax, realistic turnover and the maintenance reserve. Do this for the expected case and for a case combining lower rent, vacancy and a repair. If financed, repeat it using the actual loan terms; thin unlevered returns can become uncomfortable quickly when debt costs move.
 
One caution on the building charges: don’t automatically count the full amount as a landlord expense or assume it is fully recoverable from the tenant. Get the proposed lease wording and an itemised monthly breakdown. Freja also needs to confirm whether parking, storage or furnishings are necessary to achieve PLN 10,460, because their upkeep may be hidden inside the rent assumption.
 
Before deciding, I’d request the latest building charge statements, actual insurance and property-tax amounts, details of planned building works, and written management pricing. Then ask the rental agent to separate achievable base rent from every tenant-paid charge. If the net yield only clears your hurdle under perfect occupancy, the answer is probably to negotiate rather than rely on the headline 5.3%.
 
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