Warsaw serviced apartment at PLN 1,146,000 — does the yield justify it?

[anchor.honest]

I keep changing my mind on a 2-bed serviced apartment in Warsaw. Purchase price is PLN 1,146,000, expected rent PLN 5,306/month, and the advertised gross yield is about 5.6%.

My base case assumes no appreciation. I have allowed for vacancy, management, routine maintenance and one larger repair reserve. The building appears sound, although weak energy performance could materially affect costs and future demand.

Which local expense am I most likely underestimating, and what net yield would make this risk worthwhile?

 

[woodworksAndKey]

The first number I would pin down is the recurring building or service charge, including exactly which parts can be passed to the occupant. In a serviced apartment, turnover-related cleaning and small replacements can also erode income faster than a general maintenance allowance suggests.

With only 5.6% gross, I would personally want the calculations to leave around 4% net before financing. Otherwise there is not much room for surprises.

 

[DailyLens]

Is PLN 5,306 a contracted monthly payment to the owner, or projected accommodation revenue before management, cleaning and vacancy? That distinction could change the deal completely. I would also ask whether insurance, property tax and utilities are already included anywhere in your model.

 

[handy_page]

I think 4% net may still be too thin here. The OP is assigning nothing to appreciation and has already identified energy performance as a risk. Unless the income is unusually dependable, I would want a larger margin rather than treating 4% as automatically adequate. Financing would make that more important: test higher borrowing costs and several empty months, not just the expected case.

 

[liv_quinn]

Before choosing a target yield, rebuild the calculation from actual cash movements. Start with PLN 5,306 × 12, then deduct separately: vacancy, management, service charges, turnover costs, insurance, property tax, routine maintenance and the larger repair reserve. Keep financing below that line so you can compare the property itself with the leveraged result.

Also run a second case with lower rent, more vacancy and higher energy-related costs. If the deal only works when every assumption is favourable, the 5.6% headline is doing too much of the selling.