20% return in real estate? Yes, it's possible.

One year ago, at the end of September I bought this apartment. Or, invested 14 000 €, as this was my intention. One year has passed, so it's time to look, how good or how bad my investment was.

For the renovation I have added a little bit more than 2 000 € of my own money, so we can say, that invested amount was 16 000 €. Renovation took around 4 months, and these months without any revenue are also included in my calculations.

I started with a short term rent, and in the period of 1 year (including renovation cost) had 9,7k of expenses. That looks like quite a big number, than I look at it now, almost the same as amount I have invested. On the other hand, during the year period I have collected 4,95k So if we do some math, we'll see that my balance is -4,75k. But I took 4k loan for the renovation, so minus is about 750 € And that is quite good, as the value of the property was increased (giving me higher revenue and higher price, if I would like to sell it) and it almost payed off in 1 year.

Yellow line shows expenses. It's normal, that at the beginning during the renovation I had tons of them. Blue line shows amount I have collected. And the red one - balance. So at the begging of the year, once I started to rent I had a minus due to high taxes and low number of people renting my place

But let's get back to the calculation of the revenue. In total in one year I had 4 950 € income / 23 700 € expenses = 20,83 % And that is quite nice, as property value was not included. I left it as a nice bonus for the retirement, if I would still have it.
Everything got mixed during the year, but from the initial investment I received around 3200 € Everything was invested into a different things, but I will talk about that in future posts.

In the last post I did some calculations, and it turned out, that in my case long term is more profitable than the short one. And that is true, as I was able to rent my apartment for 480 €, leaving me around 320 € per month with 1 year contract.
If I do a quick prediction calculation for the next year, I should earn around 320*12 = 3840 € And that would be 24% revenue from my initial invested amount. There might be same expenses during the year, so it will probably be around 20%, but it's still good, as I'll have a lot more free time than with a short term rent.

And for the end let's calculate, what return I would have after 1 year if apartment would have been bought without loan from the bank. Apartment price was 41 000 € + 8340 € (expenses are lower, because loan fees were taken off) = 49340 € As income remains the same, profit would be: 4950 / 49340 = 10 % That is also quite nice, as average is around 7 % (at least most of the experts say).