This type of rent tends to rise until the return on capital is around 4 percent (which in this example would correspond to a rent of 3,000–3,500 euros per month, or 40,000 per year). Hence this tenant’s rent is likely to rise in the future. The landlord’s annual return on investment may eventually be enhanced by a long-term capital gain on the value of the apartment. Smaller apartments yield a similar or perhaps slightly higher return.
