What factors influence the profitability of renting out a flat in Gdańsk?

The profitability of a rental property often seems straightforward to calculate: all you need to do is check how much the tenant will pay each month and compare that with the property’s price. However, this approach is usually too simplistic. As I have observed in my work with property owners, when renting flats in Gdańsk The rent alone does not necessarily indicate whether the property will actually be profitable.

My name is Rafał Radomski and I have been running my own estate agency for many years, helping clients to sell, buy and rent flats in the Tri-City. In my work, I often meet people who ask about the expected rental profit before they have carefully taken all the costs into account. It is not just the monthly rent that matters, but also the purchase price, the standard of the flat, maintenance costs, periods of vacancy, taxes, any mortgage, and the quality of the tenant themselves.

From my own experience, I know that the biggest mistake is to calculate profitability „by taking shortcuts”. The owner looks at the rent quoted in the advert, multiplies it by 12 months and assumes that is exactly how much they will earn in a year. In reality, the outcome may be different if there is a gap in tenancy, a need to repair fixtures, refurbish the property, or if the service charge is too high. In this article, I’ll show you what factors are worth considering and how to approach the calculations sensibly – without promising specific returns. I hope you enjoy reading it.

Table of contents

• Why does a high rent not always mean a high return?
• What is the biggest factor affecting the profitability of renting out a flat in Gdańsk?
  • Location, standard and realistic rental price
• How do you calculate the approximate rental yield?
  • What costs should a homeowner not overlook?
• Factors affecting rental profitability
• Can an estate agent help improve the rental yield?
• FAQ - Frequently asked questions

Why does a high rent not always mean a high return?

A high rent looks good in an advert, but it doesn’t always translate into actual income for the landlord. If the price is too high given the location, standard or competition in the area, the flat may take longer to find a tenant. Every month the property stands vacant reduces the annual return, even if you later manage to sign a lease for a higher rent.

It is worth distinguishing between revenue and income. Revenue is the rent received from the tenant. Net income only appears after deducting the owner’s costs, such as tax, insurance, repairs, refurbishment of the flat, any commission, mortgage repayments or periods without a tenant. Therefore, when assessing the profitability of a tenancy, it is not enough to ask: „How much can I get each month?”. You need to ask: „How much is actually left after costs?”.

What has the greatest impact on profitability? flat rental in Gdansk?

When renting a flat, location is the most important factor, but it’s not just about the name of the neighbourhood. What counts is the specific location of the property: distance from public transport, access to trams or the SKM, proximity to universities, office buildings, shops, recreational areas and parking spaces. Two flats in the same neighbourhood can be completely different in terms of their appeal to tenants.

The second important factor is the layout. A functional two-room flat is often easier to let than a larger property with a difficult layout. The standard of finish, the condition of the building, the floor, the lift, a balcony, a storage room and a parking space are also important. Tenants are increasingly looking not only at the floor area itself, but also at the convenience of everyday living.

Profitability is also influenced by:

• Administrative rent
• Utility and heating costs
• Technical condition of the flat
• Quality of equipment
• Target tenant group
• Seasonal fluctuations in demand
• Competition in the area
• The time it takes to find a tenant
• The risk of repairs after the tenancy ends

Location, standard and realistic rental price

At renting flats in Gdańsk – even though it is an active market – does not mean that every property will automatically find a good tenant. The rent must be in line with the location, standard and current demand. A rent that is too low reduces the owner’s return, but one that is too high may prolong the time it takes to secure a tenant.

The safest approach is to assess a flat from the perspective of a specific tenant. A couple working remotely will have different expectations to a student, and a family with a child will have different expectations again. A good match between the property and the target group often has a greater impact on the stability of the tenancy than a single, inflated price.

How do you calculate the approximate rental yield?

It is worth calculating rental profitability carefully. The aim is not to produce a nice-looking figure on a spreadsheet, but to check whether the investment makes sense once the actual costs have been taken into account. The simplest formula is as follows:

annual rental income – annual owner’s costs = estimated net rental income

You can then calculate the estimated return:

estimated net income / total investment cost × 100% = estimated net return

When calculating the total cost of the investment, it is worth taking into account more than just the purchase price of the flat. You must also take into account notary fees, stamp duty on the secondary market, commission, renovation, furnishings, preparing the property for letting, and any repairs needed following the previous owners. Only then will the figure be closer to reality.

What costs should a homeowner not overlook?

The costs that are most often overlooked are those that don’t come up every month. The landlord remembers the service charge, but does not always factor in repainting after a tenant leaves, replacing household appliances, minor repairs, insurance, rental tax or periods of vacancy. And it is precisely these factors that can alter the actual profitability.

When making calculations, it is advisable to adopt a conservative approach. I wouldn’t automatically assume full occupancy for 12 months of the year or the absence of any maintenance costs. A flat is an investment, but it is also a property used on a daily basis, so wear and tear on the fixtures and fittings and periodic repairs are a normal part of letting.

Factors affecting rental profitability

Factor	How does it affect profitability?	What to look out for?
Purchase price of the flat	The higher the purchase price, the harder it is to achieve a high rate of return with the same rent	Calculate the total cost of the investment, not just the advertised price
Location	A good location can reduce vacancy rates and improve rental stability	Transport links, universities, offices, amenities, parking, the neighbourhood’s appeal
Standard of the flat	A higher standard may increase the rent, but it also increases the cost of preparing the premises	Not every renovation leads to a proportional increase in profitability
Layout of the premises	A practical layout makes it easier to let the property and attracts a wider range of potential tenants	Number of rooms, separate bedroom, workspace, balcony
Administrative rent	High fees may make the offer less attractive	Renovation fund, heating, advance payments, costs of common areas
Vacancy	Every month without a tenant reduces the annual profit	Adopt a cautious approach; do not rely solely on full occupancy
Tenant quality	A good tenant reduces the risk of rent arrears, damage and high turnover	Verification, deposit, contract, handover report
Loan	The instalment can have a significant impact on monthly cash flow	Calculate the actual cash flow after all costs
Repairs and refurbishment	Periodic costs reduce net income	Allow for a provision for maintenance, painting and replacement of equipment
Presentation of the offer	Good photos and a description can help you find a tenant more quickly	Photo shoot, description, 3D tour, fair price
Leasing model	Long-term, medium-term and short-term leases involve different risks	Compare the owner’s involvement, seasonality and operating costs
Rental tax	It affects the owner's net income	Include it in the calculation, rather than waiting until after the contract has been signed

Can an estate agent help improve the rental yield?

Cooperation with estate agency does not guarantee a specific profit, as no responsible person should offer such a guarantee in the rental market. However, it can help to minimise mistakes that often reduce actual profitability: an incorrectly set price, a poor advertisement, a random tenant, a lack of screening of applications, or an inaccurately drafted contract.

At Radomski Nieruchomości, we take a broader view of letting than simply focusing on the monthly rent. It is important to prepare the listing, analyse the price, present the property, interview prospective tenants, verify the tenant’s background, handle the deposit, draw up the tenancy agreement, and ensure the security of the entire process. Sometimes it is better to let a flat a few days later, but to a reliable tenant, than to sign a contract quickly and later have to deal with arrears or damage.

Our estate agency can also help the landlord see the property through the tenant’s eyes. Sometimes a small change to the furnishings, better photos, a clear description or a realistic price make a bigger difference than an expensive renovation. In letting, it is not just the maximum rent that counts, but also liquidity, predictability and risk mitigation.

Please feel free to contact all interested parties. 

+48 783 187 968 (Gdansk)
+48 884 843 118 (Gdynia)
biuro@radomskinieruchomosci.pl

FAQ - Frequently asked questions

1. What factors affect the profitability of letting a flat in Gdańsk?

Profitability is primarily influenced by the purchase price, rent, maintenance costs, the standard of the property, its location, vacancy rates, taxes, repairs and the quality of the tenant. Only once these factors have been taken into account can one assess whether letting the property is actually profitable.

2. How do you calculate the return on investment for letting a flat?

The simplest method is to subtract the annual costs incurred by the owner from the annual rental income, and then divide the resulting net income by the total cost of the investment. The result should be treated as an estimate, as the return on investment may vary depending on costs, vacancy rates and market conditions.

3. Does a higher rent always mean a higher profit?

Not always, because setting the rent too high can prolong the search for a tenant. Every month the property stands empty reduces the annual return, so it is better to set a rent in line with the market than a price that only looks good in the advert.

4. How does vacancy affect the profitability of letting?

Vacancies directly reduce rental income, as the owner does not receive rent but still has to bear some of the costs of maintaining the property. It is therefore advisable to base calculations on a conservative scenario rather than assuming full occupancy throughout the year.

5. Does the estate agent help with the profitability of the rental?

An estate agent can help you set a realistic price, draw up a tenancy agreement, select tenants and sort out the paperwork. They cannot guarantee a specific return, but they can help minimise mistakes that lead to vacancies, unsuitable tenants or sub-optimal rent.