Property ROI in Georgia: How to Calculate It Correctly with Real Numbers

Property ROI in Georgia: how to calculate correctly with real numbers 🧠

Investing in Georgian property can be attractive, but accurate ROI calculation separates good deals from disappointing ones. This guide explains what to count, how to model scenarios, and practical tips tailored to Georgia's market.

What ROI means and why it matters

ROI (return on investment) measures the percentage return you get from an investment over a year. For property investors it helps compare different assets, decide between long-term vs short-term rentals, and understand the real profitability after costs.

Core formula and components

Basic formula

ROI = (Net annual income / Total investment) × 100%

• Net annual income = annual gross rent − annual expenses (management, taxes, maintenance, utilities borne by owner, vacancy reserve).
• Total investment = purchase price + initial repairs and legal fees + commissions.

Always include

• Agent commissions and legal fees.
• Taxes and any registration costs.
• Renovation, furnishing, and initial setup expenses.
• Management or cleaning fees (especially for short-term rentals in cities like Batumi).
• Vacancy reserve — allow for periods without tenants.

Step-by-step calculation

1) Estimate realistic monthly rent based on comparable listings for your strategy (long-term vs holiday rent).
2) Multiply by 12 for annual gross income.
3) Subtract annual recurring expenses (maintenance, taxes, insurance, management, utilities if owner pays) and a vacancy allowance.
4) That gives you net annual income.
5) Sum one-off investment costs: purchase price, renovation, legal, and commissions.
6) Apply the formula to get ROI.

Example (for illustration only)

• Expected annual rent: A.
• Annual expenses: B.
• Initial investments: C.

ROI = ((A − B) / C) × 100%.

Note: these are placeholders — insert real numbers from your chosen location and strategy.

Georgia-specific factors that affect ROI

• Seasonality: coastal and touristic areas often show high short-term rental income during peak season but require reserves for off-season.
• Currency exposure: some rents and costs may be in foreign currency — consider exchange risk.
• Tax rules: rental taxation varies by ownership and usage patterns; check current local rules.

Practical tips to improve ROI ✅

• Minimize initial costs where possible: find properties needing light renovation or already furnished.
• Choose micro-locations with consistent demand: access to transport, services, and attractions increases occupancy.
• Model three scenarios: worst-case, base-case, and best-case — compare ROIs across them.
• Use management services only if they increase net yield or save meaningful time.
• Keep a reserve fund: plan several months of expected income as a buffer.

Common mistakes to avoid

• Counting only gross rent and ignoring expenses.
• Overestimating occupancy or seasonal rates.
• Forgetting one-off costs like renovation or legal fees.

Closing checklist before you buy 📝

Checklist: verify realistic rent, calculate recurring costs, sum initial investments, compute ROI for multiple scenarios, and confirm legal status.

If you'd like, we can run numbers for a specific property and prepare a realistic financial model tailored to your goals. Start a property search or browse apartments on BuyHome: https://buyhome.ge/en/search and https://buyhome.ge/en

Contact us — we'll help choose the right property and calculate ROI with real data.