Small apartments in Riga earn moderately good yields
Residential Valuation Specialist | October 13, 2018
|Last Updated: Oct. 13, 2018|
|RIGA CITY - Flats||COST (€)||YIELD (p.a.)||PRICE/SQ.M. (€)|
|TO BUY||MONTHLY RENT||TO BUY||MONTHLY RENT|
|40 sq. m.||80,520||343||5.11%||2,013||8.58|
|70 sq. m.||199,150||723||4.36%||2,845||10.33|
|120 sq. m.||334,680||1,132||4.06%||2,789||9.43|
|50 sq. m.||106,650||544||6.12%||2,133||10.88|
|120 sq. m.||254,280||1,177||5.56%||2,119||9.81|
|65 sq. m.||101,465||n.a.||n.a.||1,561||n.a.|
|120 sq. m.||200,160||n.a.||n.a.||1,668||n.a.|
|55 sq. m.||67,265||n.a.||n.a.||1,223||n.a.|
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you´ll really earn) are typically around 1.5% to 2% lower.
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule
Gross rental yields, i.e., the gross return on investment in an apartment if fully rented out, in the centre of Riga are 5.7% for a 50 square metre (sq. m.) apartment. Such an apartment might cost around EUR 450 per month to rent, but around EUR 90,000 to buy.
These are moderately good yields. But in the centre larger apartments of 120 sq.m. yield only 3.8%. Our research suggests that rents that people are prepared to pay in the centre for these larger apartments are less than they might be prepared to pay, say, in Jurmala, where the flats are mostly new. EUR 275,000 is a typical price for a 120 sq. m. apartment in the centre, while EUR 300,000 is typical for a 120 sq.m. flat in Jurmala, but the rent you might get on the latter seems to be 1/3 higher, bringing yields up to 4.8%.
The property market´s recovery began in 2010 and accelerated in 2011, but since then the market has been much quieter.
Round trip transaction costs are low to moderate in Latvia. See our Property transaction costs analysis for Latvia and Property transaction costs in Latvia, compared to the rest of Europe