How fast do you get your money back from renting an apartment in Europe – Top 5

Following the financial crisis and the decline in banks interests, more and more people have begun to buy real estates for investment purposes, relying on renting them and earning a higher return on the one obtained from a traditional bank deposit or other financial instruments. Read below what are the TOP 5 European cities where the purchase of an apartment for rent could bring the biggest gains.

The yield, or rental gain, is a measure of the attractiveness of a real estate investment. It shows what percentage of the amount used to buy the apartment you get each year from renting that property.
For example, if a person purchases an apartment with 200,000 euros and rents it with 833 euro / month (equivalent to 10,000 euro / year), that property generates a yield of 5% per year. As a result, that person will recover the money used to buy the apartment in 20 years (5 x 20 = 100%).

1. First place: Chisinau, Republic of Moldova

10% yield for a property (generally an apartment) with an average area of 120 sqm.
Time required to recover the purchase price: 10 years.

Pluses:
Some of the biggest real estate returns in Europe, but also in the world
The property market favorable to the owners

Minuses:
High taxes
Payments for property acquisition are made almost exclusively in cash
One of the poorest countries in Europe
Secessionist risks

2. Second place: Kiev, Ukraine

9.09% yield for a property with an average area of 120 sqm.
Time required to recover the purchase price: 11 years.

Pluses:
Low cost of transactions
Moderate tax on rental income
The property market favorable to the owners

Minuses:
Expensive properties reported on the country’s GDP
Corruption and risk of political instability
Vulnerability to international crises

3. 3rd place: Dublin, Ireland

7% yield for apartments.
Time required to recover the purchase price: 14 years and 3 months.

Pluses:
Moderate transaction costs
Strong market to rent for migrants
Strong and stable economy

Minuses:
Lower rents in recent years
Strong laws favorable to tenants

4. 4th place: Budapest, Hungary

6.42% yield for a property with an average area of 120 sqm.
Time required to recover the purchase price: 15 years and 7 months.

Pluses:
Proprietary laws
Higher yields in Budapest
Moderate and low transaction costs

Minuses:
Minor property restrictions
Moderate / high taxes on rental income

5. 5th Place: Bucharest, Romania

6.07% yield for a property with an average area of 120 sqm.
Time to recover the purchase price: 16 years and 6 months.

Pluses:
Moderate transaction costs
The property market favorable to the owners

Minuses:
Expensive properties reported on the country’s GDP