ROI of Rental Properties
Investing in rental property can be profitable with correct calculations.
Basic Formula
ROI = (Annual Rent - Expenses) / Investment × 100%
Sofia Example
- 2-bedroom price: 120,000 EUR
- Monthly rent: 500 EUR
- Annual income: 6,000 EUR
- Expenses (taxes, repairs): 800 EUR
- Net income: 5,200 EUR
- ROI: 4.3% annually
Additional Costs
- Property tax: 0.15% of tax assessment
- Income tax: 10% of rent
- Common areas: 30-50 EUR/month
- Repairs: 200-500 EUR/year
- Vacancy: 5-10% of year
How to Improve ROI
- Buy below market price
- Furnished vs unfurnished (20-30% higher rent)
- Choose sought-after area
- Long-term tenants