Warsaw 5-bed at PLN 2,528,000 and PLN 13,970/month — does the net yield justify it?

[liv_quinn]

I’m assessing a 5-bed new-build flat in Warsaw at PLN 2,528,000. Expected rent is PLN 13,970 per month, giving a headline gross yield of roughly 6.6%.

The building looks sound, but the spreadsheet becomes much less attractive once I include vacancy, management, routine maintenance and a reserve for one larger repair or bad year. What Warsaw-specific cost am I most likely to be underestimating? Also, what net yield would compensate you for the vacancy and tenant-turnover risk here?

 

[rue.archer]

The 6.6% gross figure is arithmetically fine, but I would focus on what sits outside that advertised rent. Is PLN 13,970 achievable excluding building charges and utilities, or would the owner absorb some of those? Also, are you planning one tenancy for the whole flat or separate room arrangements? A 5-bed can have very different vacancy, management and turnover costs depending on that answer.

 

[handy_page]

I wouldn’t assume management is the biggest problem. If this is financed, interest-rate and refinancing sensitivity could overwhelm small differences in maintenance. If it is a cash purchase, then the opportunity cost of tying up PLN 2,528,000 matters more.

Insurance, property tax and the tax treatment of rental income also belong in the model, but the exact impact depends on ownership structure and current Polish rules.

 

[liv_quinn]

Good questions. The PLN 13,970 is the stated expected rent, but I have not yet confirmed in writing which building charges would remain with me. I’m also still comparing a single lease with a room-based approach rather than assuming they produce the same occupancy.

I’ll rerun it with both structures, plus a financing stress case even though leverage is not yet decided. The charge allocation now looks like the missing fact I need before debating the “right” net yield.

 

[clear_wall]

One caveat: new-build does not mean maintenance-free. Early costs may be low, but a 5-bed flat has more heavily used fixtures and more opportunities for damage or replacement, especially with frequent tenant changes. I’d keep the larger repair reserve rather than letting the new-build label justify removing it. I’d also model vacancy by tenancy strategy, not just apply one percentage to annual rent.

 

[kian_roofs]

Before proceeding, ask for an itemised schedule of building charges, clarify which items can realistically be passed to tenants, and obtain management quotes for both tenancy models. Then run three cases: expected occupancy, a turnover-heavy year, and a larger repair combined with vacancy.

I wouldn’t choose a universal target net yield. Compare the stressed cash return with lower-effort alternatives available for the same capital; if the premium disappears after realistic costs, the headline 6.6% is not compensating you.