I’m assessing a 2-bed detached home in Riyadh at SAR 2,906,000, with expected rent of SAR 11,400 per month. That gives a headline gross yield of roughly 4.7%, but the margin looks much thinner once realistic costs are included.
My conservative model allows for vacancy, management, routine maintenance, insurance and a reserve for one larger repair. I’m also concerned that property tax or other local charges could materially alter the result, while financing would make the cash flow even more sensitive. The building appears sound and rental demand looks credible, but I do not want to assume immediate reletting or underestimate tenant-turnover costs.
For people familiar with Riyadh rentals: which local ownership or operating cost is most commonly missed, and what vacancy allowance would you use for this type of property? I’d also be interested in the net yield you would require at this purchase price, plus any recent indication of realistic days on market for comparable 2-bed detached homes.
My conservative model allows for vacancy, management, routine maintenance, insurance and a reserve for one larger repair. I’m also concerned that property tax or other local charges could materially alter the result, while financing would make the cash flow even more sensitive. The building appears sound and rental demand looks credible, but I do not want to assume immediate reletting or underestimate tenant-turnover costs.
For people familiar with Riyadh rentals: which local ownership or operating cost is most commonly missed, and what vacancy allowance would you use for this type of property? I’d also be interested in the net yield you would require at this purchase price, plus any recent indication of realistic days on market for comparable 2-bed detached homes.