Installment plans in Batumi: how to calculate the yield of a new build
In our worked example, a $5,000 markup for a 14-month installment plan equals about 23% a year. A one-year completion delay takes about $4,560 of net income on top of that. Count the calendar, not the down payment.
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The figures are a worked example. We do not forecast resale prices or assess the reliability of specific developers.
The example apartment
| Term | Example |
|---|---|
| Price if paid in full | $55,000 |
| Price on installments | $60,000 |
| Contract and 30% down payment | December 2026, $18,000 |
| Balance | $42,000: 14 monthly payments of $3,000, January 2027 to February 2028 |
| Completion per contract | March 2028 |
| Renovation | 3 months |
| First tenant | July 2028 |
| Rent | $450 a month |
What the installment plan really costs
$60,000 against $55,000: you overpay $5,000. You cannot compare this 9% with a bank's annual rate: it does not build up over one year, and you repay the debt gradually.
A fairer way to count is this. Paying in full, you would hand over $55,000 in December. On installments you hand over $18,000, so in effect the developer lends you $37,000. You repay $42,000 in payments of $3,000 over 14 months. The rate at which these payments equal the $37,000 debt is about 1.7% a month, or roughly 23% a year.
Now you can compare this figure with a loan from your bank and with what the money you have not yet paid could earn. If you have $55,000 now, an installment plan with this markup is expensive. If you do not have the money now, compare it with a loan, not with the price.
The calendar: when money goes out and when it comes in
From December 2026 to February 2028 you pay the developer. In March 2028 you get the keys, renovate until June, and the tenant moves in in July. In the first four months after the keys, March to June, the apartment needs money for the renovation and earns nothing.
What a delay does
Compare three calendars. To avoid overstating the loss, we count net income, not rent: $450 minus 5% tax, 5% set aside for repairs and $25 of building fees. That gives about $380 a month (a worked-example assumption).
| Per contract | 6-month delay | 12-month delay | |
|---|---|---|---|
| Keys | March 2028 | September 2028 | March 2029 |
| First tenant | July 2028 | January 2029 | July 2029 |
| Months without income beyond the plan | 0 | 6 | 12 |
| Net income lost | 0 | $2,280 | $4,560 |
What is not included, because it depends on your contract and the market:
- Renovation may cost more a year later. An estimate made in advance may not hold a year on.
- Payments. If they are tied to dates rather than to construction stages, in a delay you pay on time and get the keys later. This is the main question for the contract.
- Penalty. If the contract promises compensation for delay, it reduces the loss. Check whether there is one and how to claim it.
The comparison with a bank deposit is counted separately: it is not a loss from the delay but another way to invest the same money. The calculator shows it.
Renovation and currency
If the apartment is priced in dollars, while the renovation and daily life are in lari, the exchange rate also becomes part of the calculation. For what the full entry cost is made of, see the article "An apartment in Georgia: the full cost before the first rent".
Selling before completion
Some buyers take a new build in order to sell it before completion. We do not forecast the future sale price: it depends on the market, the area and how many similar apartments the developer itself is selling. If you are counting on a resale, also calculate the case where you could not sell at your price.
What to ask the developer
- The price when paid in full and on installments: in writing.
- Payment dates: tied to the calendar or to construction stages?
- What the contract says about delay: penalty, deadlines, the right to terminate?
- The list of works for the frame: what is included and what is not.
- The building permit and the stage of the building today.
How to calculate it in the calculator
The calculator has no payment calendar or completion dates yet, so it calculates neither the installment plan by dates nor the delay. The calculator below shows the apartment after completion, with no delay: price $60,000, rent $450, one empty month at each change of tenant, a letting fee per new tenant. Do not subtract the delay loss from the table above from this result: they cover different periods and different sets of costs. A delay shifts the whole first year of rental to a later date.
The calculation below: the apartment is already completed and renovated, with no installment plan and no delay. Long-term rental, price $60,000, rent $450 a month, a tenant from day one, and at each change of tenant every 2 years, 1 empty month and a letting fee.
The calculator with this property's figures
The same calculation as on the home page. Change any figure — the answer recounts.
Questions and answers
Why 23% if the overpayment is only 9%? The 9% builds up over 14 months, not over a year, and the debt keeps shrinking: on average you owe the developer much less than $37,000. The annual rate shows the price of money the same way a bank shows it.
Where does the $380 of net income come from? It is a worked-example assumption: rent of $450 minus 5% tax, 5% set aside for repairs and $25 a month of building fees. Put in your own figures.
This is a worked example. It is not investment, tax or legal advice. We do not assess the reliability of specific developers.
REAL ESTATE I YIELD I TAXES · Levelvale
Sources
This is a calculation, not investment, tax or legal advice.
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