They Offer 18% Annual Return. Taking It?
They Offer 18% Annual Return. Taking It?
The number looks convincing.
18% is noticeably more than a bank deposit.
Enough to stop the eye.
Enough to mentally calculate future profit.
And enough to make the wrong decision.
Because before asking "take it or not," it's worth asking a different question:
18% — of what exactly?
Rental income?
Asset value growth?
Cashback?
Purchase savings?
Profit from resale?
Or a pretty number from a presentation that can't be realised in reality?
At first glance the difference is small. It says the same thing everywhere: 18%.
But behind this number may hide very different income models, different risks and different costs.
Which means very different outcomes for the investor.
The percentage says nothing about the money yet
Imagine two offers.
The first promises 18% per year.
The second — only 13%.
Which is more profitable?
The answer seems obvious, until we start counting.
In the first case, the income must cover:
- management;
- maintenance;
- repairs;
- insurance;
- taxes;
- commissions;
- vacancy periods;
- entry and exit costs of the deal.
In the second, most of these costs are already accounted for.
And then it turns out the beautiful 18% becomes 9% in hand, while the modest 13% stays almost intact.
That's why a high percentage doesn't always mean high yield.
Sometimes it just means part of the costs hasn't been shown yet.
Where are the costs?
This is one of the most uncomfortable questions in any investment presentation.
And one of the most useful.
Say a property should yield 18% from rent. Then it's worth finding out:
Who will find tenants?
What happens if the property sits empty for two months?
Who pays for minor repairs?
And major ones?
Are taxes included?
The management company's commission?
Furniture, appliances and their wear?
Deal registration?
Selling the asset at the end of the investment period?
Each individual cost may seem insignificant. But together they can eat a third of the expected income — sometimes more.
The problem isn't the costs themselves. They exist in almost any normal investment.
The problem starts when the yield is shown before costs, but named as if that exact amount will land in the investor's account.
Want a specific offer checked across 23 criteria? Message us on Telegram or WhatsApp — we'll count the real number.
What if the 18% is price growth?
Then the next question appears:
Has the growth already happened, or is it only forecast?
Past results can be verified. Future ones can only be assumed.
The price can indeed rise by 18%. But for that profit to become real, the asset must be sold.
And selling is not one button.
You need to find a buyer.
Agree on a price.
Pay commissions and taxes.
Possibly give a discount.
And wait for the deal.
On paper the asset has already appreciated.
But until the buyer transfers the money, it's not profit. It's a valuation.
Between "the asset is worth more" and "I earned" sometimes lie months, extra costs and a serious discount.
What if it's cashback?
Cashback can also look like yield.
You buy an asset and get part of the value back — for example, those same 18%.
Sounds wonderful.
But cashback doesn't necessarily make the purchase profitable.
First you need to compare the price with the market.
If a similar asset without cashback costs 20% less, they didn't give you money back. They first added it to the price, then solemnly returned part of it.
So the right question isn't:
How much will they give me back?
But:
How much will I actually pay compared to the real market price?
Cashback only matters after that comparison.
Rent, growth and resale can't be added up blindly
Offers that assemble yield from several sources at once look especially impressive.
For example:
- 7% from rent;
- 8% from value growth;
- another 3% from a profitable resale.
Total — 18%.
The math checks out.
But the risks of these components are different.
Rental income can arrive regularly, if there's demand and the property isn't vacant.
Price growth exists only in a forecast, until a sale is made.
A profitable resale depends on liquidity, market conditions and the presence of a buyer.
You can add these figures up. But only if next to them it says:
- what's already confirmed;
- what's guaranteed by contract;
- what's based on historical data;
- and what's a scenario.
Otherwise a forecast easily starts to look like a promise.
Yield depends not only on the amount, but on time
Imagine you're promised to earn 18%.
But when?
In a year?
In two years?
In five years?
18% in one year and 18% in three years are completely different offers.
There's another detail: when exactly will you get the money?
You can receive income monthly.
Or once at the end of the year.
Or wait for a payout until the asset is sold.
Formally the total may be the same. But the value of that money and the level of risk will differ.
The longer capital stays frozen, the more important it is to understand:
- whether you can exit early;
- how much an early exit will cost;
- who you can sell the asset to;
- how long a sale usually takes.
Yield without a term is an unfinished number.
Liquidity: there's income, but no money
An investment can look profitable in a report and at the same time give no access to the money.
For example, the asset's value grew by 18%. But there are no buyers at that price.
You can wait.
You can lower the price.
You can sell quickly — and lose most of the calculated profit.
That's why liquidity can't be considered a secondary characteristic. It determines whether you can turn expected yield into real money.
Often a more liquid asset with moderate yield turns out to be more practical than an asset with a high percentage that can't be exited without serious losses.
Risk also has a price
If two instruments promise the same 18%, it doesn't mean they're equally attractive.
In one case the income is backed by a clear cash flow and transparent terms.
In the other it depends on market growth, currency rates, operator performance, asset occupancy and a future buyer all at once.
The percentage is the same.
The probability of getting it is different.
So you need to assess not only potential profit, but also the scenario where something goes off plan.
What happens if demand drops?
If costs rise?
If the asset can't be sold in time?
If the management company changes the tariff?
If the forecast growth doesn't happen?
A good investment decision withstands not only the optimistic scenario.
It stays acceptable even when reality turns out slightly worse than the presentation.
What to count instead of the advertised percentage?
Not the maximum yield.
Not the figure in large font.
And not the most successful scenario.
What to count is real net yield — what remains after all mandatory expenses.
Simply put:
Net yield = all actually received income − all related expenses
But that alone isn't enough for a sound decision.
You also need to account for:
- investment term;
- payout regularity;
- liquidity;
- taxes;
- currency risk;
- probability of vacancy;
- cost of exit;
- optimistic, base and negative scenarios.
Only then does the percentage become a decision.
A simple poll
What matters more to you?
The maximum percentage on the first page of the presentation?
Or:
The real yield you're highly likely to receive in hand?
The first is easier to sell.
The second is harder to count.
But it's the second that determines whether the investment turns out well.
Seven questions before deciding
Next time you see an offer with a high yield, don't rush to agree or refuse.
First ask:
- What exactly makes up this percentage?
- Is it guaranteed income, a historical result, or a forecast?
- What costs aren't deducted yet?
- When and how will I get the money?
- What has to happen for the forecast to come true?
- How will I be able to exit the investment?
- How much will remain in hand in the base and negative scenarios?
If there are clear answers to these questions — the offer can be discussed.
If instead of answers they show you a big number again — that's also an answer.
So take the 18% or not?
Maybe yes.
18% can be an excellent yield.
But only once it's clear:
- where the income comes from;
- what costs reduce it;
- what risks you're taking;
- how long the investment will take;
- how easy it is to get your money back;
- and how much will actually stay with you.
Because the investor's task isn't to find the biggest percentage.
The task is to understand how real the profit is, what backs it, and whether it justifies the risk.
We don't sell promises.
We count the decision.
Show us a presentation with "18%" — we'll break it down into real figures, costs and risks. Write to us on Telegram or WhatsApp.
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