Blog · 2024-09-14

Property investment in 2025: how long until your money comes back?

Real estate has long been regarded as one of the safest ways to preserve and grow capital. Buying a property to rent out can generate steady income, particularly when prices are climbing and rental demand is high. But for an investment to actually pay off, a great deal depends on the details: the purchase price, the rental rate and the economic climate of the region. Here we look at how quickly property investments recoup their cost in cities around the world.

We analysed rental prices for a one-bedroom apartment within the city limits, alongside the cost per square metre, to work out how many years it would take to recover the money spent on a 50-square-metre apartment if it were rented out.

Lisbon, Portugal

Lisbon is a favourite among investors thanks to rising tourist numbers and attractive tax breaks for expats and retirees. Property prices keep climbing, which makes the city a compelling choice for long-term investment.

Price per square metre: €6,240.29
Monthly rent: €1,434.00
Purchase price (50 sqm): €312,014.50
Payback period: 18.13 years

Tbilisi, Georgia

Property in Tbilisi appeals to investors on the strength of low taxes and rapidly growing tourism. Georgia also runs programmes to attract foreign investment, which is helping to push prices upward.

Price per square metre: 5,607.33 GEL
Monthly rent: 1,958.68 GEL
Purchase price (50 sqm): 280,366.50 GEL
Payback period: 11.93 years

Berlin, Germany

Berlin remains one of Europe's most dynamic property markets despite steep prices. Recent legislation capping rent increases may dent yields, but steady housing demand keeps the city attractive for long-term investors.

Price per square metre: €7,965.54
Monthly rent: €1,225.10
Purchase price (50 sqm): €398,277.00
Payback period: 27.09 years

Budapest, Hungary

Budapest draws attention for its strategic position in Central Europe and relatively affordable property prices. The city is popular with tourists, which sustains demand for short-term rentals.

Price per square metre: 1,423,305.64 Ft
Monthly rent: 241,433.23 Ft
Purchase price (50 sqm): 71,165,282 Ft
Payback period: 24.56 years

Valencia, Spain

Valencia is a popular place to live and holiday on the Mediterranean coast, with comparatively low housing costs and steady demand from tourists and expats alike. That makes it appealing to investors focused on short-term rentals.

Price per square metre: €2,935.80
Monthly rent: €1,069.64
Purchase price (50 sqm): €146,790.00
Payback period: 11.44 years

Paphos, Cyprus

Paphos is a resort town with a property market that is popular among European retirees and tourists. Thanks to Cyprus's favourable tax regime and affordable prices, real estate here is attractive for both long-term investment and rental income.

Price per square metre: €3,023.73
Monthly rent: €912.50
Purchase price (50 sqm): €151,186.50
Payback period: 13.81 years

Miami, USA

Miami's property market is known for its energy, with constant demand for housing from both local and foreign buyers.

Price per square metre: $6,328.49
Monthly rent: $2,823.55
Purchase price (50 sqm): $316,424.50
Payback period: 9.34 years

Buenos Aires, Argentina

Argentina's property market is appealing for its relatively low prices, though an unstable economy and high inflation can pose risks for long-term investors.

Price per square metre: $2,460.60
Monthly rent: $478.56
Purchase price (50 sqm): $123,030.00
Payback period: 21.42 years

Gold Coast, Australia

The Gold Coast is one of Australia's leading resort cities, renowned for its beaches and tourist infrastructure.

Price per square metre: A$13,500.00
Monthly rent: A$2,333.33
Purchase price (50 sqm): A$675,000.00
Payback period: 24.11 years

Dubai, UAE

Dubai remains one of the most attractive property markets thanks to its status as an international business hub and strong housing demand. Tax incentives and well-developed infrastructure make it an ideal location for investors.

Price per square metre: 18,263.31 AED
Monthly rent: 7,985.88 AED
Purchase price (50 sqm): 913,165.50 AED
Payback period: 9.53 years

Takeaways

Our analysis shows that Miami and Dubai are the most attractive cities for property investment. Both deliver the shortest payback periods, driven by high rental rates and comparatively affordable purchase prices. The longest payback periods appear in Berlin and Buenos Aires, a reflection of high property prices and unstable economic conditions respectively.

When choosing where to invest, it is important to weigh not only the potential rental yield but also the state of the property market, the economic stability of the region and the specifics of the local tax system.

FAQ

How do you calculate rental payback?

Divide the all-in purchase cost by net annual rental income to get payback in years. All-in means transfer tax, agent fees and renovation; net income means rent minus taxes, maintenance, management and vacant months. Gross yield always looks better than the real number.

How long does a rental apartment take to pay off?

It comes down to the ratio between price per square metre and local rents. Expensive cities with regulated rents stretch the payback period, while markets with strong rental demand and moderate prices shorten it. That is why the comparison has to be city by city, not country by country.

Where is it best to buy property to rent out?

Yields are strongest where prices are low relative to rents and demand is steady: university towns, tourist hubs and expat magnets. Then adjust for currency risk, non-resident taxes and short-term rental rules. A duller market often produces the better final result.

What should you count besides the yield?

Property tax, tax on rental income, management fees, insurance, repairs and likely vacancy between tenants. Check short-term rental rules too, since many cities keep tightening them and can break the whole model. Liquidity matters as well - how fast you could sell if you needed to.

Is a mortgage worth it for a rental property?

Borrowing lifts the return on your own capital when the mortgage rate sits below the property's rental yield. When it is the other way round, you top up the payments out of pocket every month. Non-residents usually face a bigger down payment and a higher rate, so build that into the maths.

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