What a Georgian apartment actually earns
Developers like the phrase "up to 12% a year". It is not invented, but it is calculated on an ideal scenario: full occupancy, peak rate, zero costs. Real life does not work that way. Here is how to count honestly.
The formula we use
Annual yield = (monthly rate × months occupied − annual costs) ÷ total cost of entry.
Two words carry the weight here: occupancy and total cost of entry. Those are exactly the ones advertising maths leaves out.
Example: a studio in Batumi
Take a real set of numbers for a seafront property.
- Apartment price: $68,000
- Renovation and furniture: $12,000
- Total cost of entry: $80,000
Income from short-term letting:
- Average nightly rate across the year: $45
- Realistic occupancy: 55% (about 200 nights)
- Gross annual income: $9,000
Now the costs that do not appear in presentations:
- Management company fee (20%): $1,800
- Utilities and internet: $700
- Cleaning and consumables: $900
- Wear on furniture and appliances: $500
- Rental income tax: around $450
Total costs: $4,350. Net income: $4,650.
Yield: 5.8% a year on the total cost of entry. Not 12%, but not bad for an asset that is also appreciating.
Example: a two-room flat in Tbilisi
- Apartment price: $135,000
- Renovation and furniture: $15,000
- Total cost of entry: $150,000
- Long-term rent: $900 a month
- Occupancy: 11 months out of 12
- Gross income: $9,900
- Costs (tax, small repairs, vacancy): about $1,400
- Net income: $8,500
Yield: 5.7% a year. Almost the same number, earned with far less effort.
What moves the result most
Occupancy, not the rate. Raising your rate 10% is hard. Losing 20% of occupancy to a poor location is easy. We always look at the competition within a three hundred metre radius.
Quality of the renovation. In short-term letting, the difference between "clean" and "worth photographing" is 15 to 25% on the rate, and it lifts occupancy through reviews.
Who manages it. A management company takes a fifth of the income, but self-managing from another country almost always ends in vacant weeks that cost more than the fee.
What to take away
A realistic benchmark in Georgia today is 5 to 9% net a year, depending on the city, the property and who runs it. Anything promised above that without a detailed calculation is worth checking twice.
We build this table for every property before purchase and show the client both scenarios, optimistic and conservative. The decision is made on the conservative one.