patrick.net

Reduce the management fees, reduce the cleaning fees and increase the rental times? It seems that you also get usage out of this property?

Have you listed the place on many rental sites? You could probably increase the rental income. The 1.5% could change drastically at that point. You didn't mention taxes, upkeep or HOA dues either.

sell it and rent it back when you visit

Nomograph says

I would sell the apartment and send all the proceeds to Greece.

you are so funny

pkennedy says

Reduce the management fees, reduce the cleaning fees and increase the rental times? It seems that you also get usage out of this property?
Have you listed the place on many rental sites? You could probably increase the rental income. The 1.5% could change drastically at that point. You didn’t mention taxes, upkeep or HOA dues either.

Even when I succeed in optimizing all those things and would succeed in doubling net rental income to €10.000, it would still be only 3% yield. Patrick says this is still too low, and I agree.

At that point if someone would take ik off my hands for €350.000, he would still pay 35 times the yearly income. That is still way too much if you ask me.

As I understand from Patrick a good buy is when you have 10% net rental income, meaning you can earn your investment back in 10 years. That would mean that the price of the appartment should fall to €50.000!!! Even when I would succeed in doubling the net rental income to €10.000 the fair value of the property would still only be €100.000, maximum €200.000.

Serpentor says

sell it and rent it back when you visit

I like your idea. Simple, profitable and effective. Thanks!

I will tell you to hold if you use a $ (dollar), but you used a € (Euro) which drops every day.

Are there similar properties in that area with better rent-to-price ratios? If you could get €350k for this place, and then buy something that's much cheaper but rents for the same amount, you'd have the same income, but would pocket the difference.

What is a normal rent-to-price ratio in your area?

Two ways to look at this home:
1. purely financial: How are property values in your immediate area? If they are at (or near) a peak (and trending down), I'd sell. You can buy back in at a later time at a lower price. This assumes you aren't in need of the money and that you're in a bubble or just past the high point. The way to tell? What are the comparable units selling for (not asking prices, selling prices)?
2. emotional: If use of the unit on a regular basis is very important - and very similar units are not easily found and rentable, I'd keep it.

"However, I do have some emotional bond with the property. I’ve been going there for holidays since I was young and do meet my family there as they also each have an appartment in the same building."

You have to distance yourself from this thinking. Unless it's the house you live in and raise a family in and enjoy the location, etc., this is just a house/condo/apartment. You have to look at an investment property as that, an investment. It's not your home anymore, it's just a house/condo/apartment. It's just like stocks and other investments.......don't fall in love with them, you have to take the emotions out of it.

Patrick - based on the responses above, you can close your web site. Most of the answers were rational and directionally correct. Everyone reading your site seems to know or have learned...and those who haven't been following - well, we need people to sell to...! Mission accomplished (non-Bush interpretation)!

Well there are some other things to consider -- Patricks numbers are great for the US, and in specific, large cities/surrounding areas.

How often are you renting this unit out? Is this a few months a year, or year round? Are you sure you're getting the best rent possible for it? If you're booked all the time, then your only additional income could come from rent increases, but if you're empty for much of the time you can work that angle as well.

How often are you using it yourself? If you had to "rent" during these times, how much would that cost you?

Has the land gone crazy in appreciation in the last decade, or are the prices reasonable?

you may consider that there may be more tourism if the Euro drops, but then again you may also loose that money again in the exchange rate, what about just renting out the property year round? and then just get a timeshare somewhere nearby? also from my limited knowledge of euro real estate, land is alot more scarce, so the property is less likely to loose alot of value (in euros), but it may be a bad time to sell based purely on exchange rates, maybe better to wait a few years for the dollar to fall, which will happen sooner or later