Real Case Study: From a €180,000 Purchase to a 6.4% Net Annual Return

1. The Property: Chosen by Filter, Not by Price

• Type: Apartment, 78 sqm

• Year of construction: 2001

• Floor: 2nd

• Condition: Good, not renovated

• Strategy: Long-term rental (not short-term)

• Location: Urban micro-location with stable rental demand

The property was not selected because it “looked cheap.”
As outlined in “How Professionals Filter Properties Before Looking at Price”, price is evaluated last, not first.

2. Total Acquisition Cost (All-In Capital)

One of the most common investor mistakes — analyzed in “The 5 Risks No Listing Ever Shows” — is ignoring the true invested capital.

ItemAmount (€)

Purchase price 180,000

Transfer tax (3%) 5,400

Notary & legal costs 3,200

Brokerage fee 3,600

Light refurbishment 7,800

Total invested capital 200,000

This is the capital that must perform.
Not the listing price.

3. Rental Income: Conservative by Design

• Market rent: €900 / month

• Theoretical annual income: €10,800

However, as discussed in “The Trap of High-Yield Real Estate”, ignoring vacancy is how most projections collapse.

• Assumption: 1 vacant month per year
  ➡️ Effective annual income: €9,900

4. Annual Operating Costs

Expense Amount

(€)Rental income tax 1,980

Property tax (ENFIA) 420

Maintenance & wear 600

Management / contingencies 300

Total annual costs 3,300

5. Net Annual Cash Flow

• Effective income: €9,900

• Total costs: €3,300

Net cash flow: €6,600 per year

6. Net Yield: The First Layer of Truth

6,600200,000=3.3%\frac{6,600}{200,000} = 3.3\%200,0006,600​=3.3%

At this point, many investors hesitate.
But as explained in “Why Real Estate Is a Long-Term Strategy — Not a Trade”, net yield alone never tells the full story.

7. Capital Appreciation: Not Luck, but Structure

Assuming a conservative annual appreciation of 2.5%:

HorizonEstimated Value

(€)Purchase 180,000

5 years~203,000

10 years~231,000

➡️ Estimated 10-year appreciation: ~€51,000

As shown in:

• “Why Location Accounts for 70% of Real Estate Value”

• “How to Identify Properties That Age Well”

capital appreciation is earned, not assumed.

8. Total 10-Year Performance (Income + Value)

SourceAmount (€)Net rental income (10 years)66,000Capital appreciation51,000Total return117,000

➡️ Total 10-year return: 58.5%
➡️ Equivalent annualized return: ~6.4%

This is precisely why, as analyzed in “Why Real Estate Still Outperforms Bank Deposits”, the comparison should never be made on interest rates alone.

9. Stress Test: Before Buying, Not After

As explained in “How Professionals Stress-Test a Real Estate Portfolio”, every serious investment must survive downside scenarios:

• Rent –10% → ~5.6% annualized return

• Two vacant years over a decade → ~5.9%

• Zero appreciation → ~3.3% (income-only)

The investment remains structurally sound, even under pressure.

10. What This Case Study Actually Shows

• This is not a “home run” investment

• It is not fast money

• It is predictable, controllable, and resilient

Exactly the type of asset discussed in:

• “Why Liquidity Is the Real Competitive Advantage”

• “How to Build a Real Estate Portfolio (and Why One Property Is Not a Portfolio)”

The Role of Poli Real Estate

At Poli Real Estate, every property is evaluated first as an investment scenario, and only second as a transaction.

We do not focus on what looks attractive.
We focus on what:

• survives numerical scrutiny

• passes stress tests

• makes sense over an entire market cycle

In many cases, the correct advice to an investor is not to buy, but to walk away from the wrong asset.

If you are interested in data-driven investment opportunities, share your investment brief at the contact button that follows.