Scenario A - base
5.91%
Net ROI
- Price + Gastos
- $259 459
- Net income/year
- $15 323
- Payback
- 16.9 years
Property returns in Uruguay: ROI and total cost of ownership
A property's return should be calculated based on the total cost of entry and after accounting for vacancy, taxes, building expenses, management, and maintenance. The calculation for apartment 403 at Dēco Maggiolo below serves as a specific example of this model rather than a promise of results for another property.
Example calculation · Dēco Maggiolo · Apartment 403
NON-VPApartment 403 in Dēco Maggiolo
Ready for immediate rental: 4th floor, 1 bedroom, 58.43 m² of living space, and a 20.22 m² terrace.
- Living area
- 58.43 m²
- Terrace
- 20.22 m²
- Total area
- 85.34 m²
- Floor/bedrooms
- 4 / 1 dorm
- Price after 10% discount
- $249 480
- Price and discount
- $277 200
- −10%
- Net ROI
- 5.91%
- Entry cost + Gastos 4%
- $259 459
- Rent/mos
- $1 650
- Net income/year
- $15 323
IRPF 10.5% on rental income – standard tax regime
- Reference
- DECO-403-NOVP-2026
- Market
- Montevideo, Uruguay
- Calculation
- July 2026
ROI: two scenarios
Returns depend on the selected entry basis
The same net income is compared using two calculation bases: payment to the developer with Gastos and the total entry cost with all specified costs.
Scenario B - total entry cost
5.28%
Net ROI
- Total entry cost
- $290 045
- Net income/year
- $15 323
- Payback
- 18.9 years
Net rental income
How net income accumulates for the year
The calculation model shows the owner’s positive cash flow: $1,277 net income per month and $15,323 for the full year.
Owner's net income
$15 323
12 months
Average monthly net income
+$1 277
Entry cost structure
From list price to total entry cost
The full entry scenario combines payment to the developer and additional costs specified in the calculation.
Total entry cost · all costs
$290 045
Payment to the developer
- Price list
- $277 200
- 10% discount
- −$27 720
- Post-discount price
- $249 480
- Gastos de Ocupación 4%
- $9 979
- Total payable to the developer
- $259 459
Additional costs
- ITP + notary fees + Montepío ~8.6%
- $21 455
- Uruguay Smart Estate Commission 3% + IVA 22%
- $9 131
- Total additional costs
- $30 586
Total entry cost
$290 045
Methodology
What's included in the calculation
The calculation was prepared by Uruguay Smart Estate based on market data from July 2026. VP status does not apply; IRPF of 10.5% applies to rental income. The developer discount is 10%. Scenario A's ROI is based on the post-discount price plus Gastos. Scenario B includes ITP, notary fees, Montepío, and the Uruguay Smart Estate commission of 3% plus IVA of 22%.
Entry costs
- • Price: $277,200
- • Developer discount: 10%
- • Gastos de Ocupación: 4%
- • ITP + notary fees + Montepío: ~8.6%
- • Uruguay Smart Estate Commission: 3% + IVA 22%
Annual costs
- • IRPF: 10.5% (non-VP)
- • Agent: 1 month of rent per year
- • Contribución: 0.30% of the price after the discount
- • Maintenance: as agreed
Rental parameters
- • Rental rate: $1,650/month
- • Market: Montevideo, July 2026
- • Management: Uruguay Smart Estate
- • Dēco Maggiolo, Piresbenlian
Detailed ROI calculation
Detailed calculation of rental income
At a rental rate of $1,650 per month, gross income is $19,800 per year. After IRPF, the management fee, and Contribución Inmobiliaria are deducted, net income is $15,323 per year.
-
$19 800
Gross income
-
−$2 079
IRPF 10.5%
-
−$1 650
Agent, management by Uruguay Smart Estate
-
−$748
Contribución Inmobiliaria
-
$15 323
Net income
| Item | Calculation | Amount/year | Amount/month |
|---|---|---|---|
| Rental rate | market, July 2026 | $19 800 | $1 650 |
| Gross income | $1 650 × 12 | $19 800 | $1 650 |
| IRPF (10.5%) | $19 800 × 10.5% | −$2 079 | −$173 |
| Agent (management by Uruguay Smart Estate) | 1 month of rent ÷ 12 | −$1 650 | −$138 |
| Contribución Inmobiliaria | $249 480 × 0.30% | −$748 | −$62 |
| Net income (net) | after all costs | $15 323 | $1 277 |
Basis of calculation
Gross yield does not equal the owner's net return
To compare properties, use one entry basis, one period, and the same mix of income and expenses. Otherwise, a more attractive percentage may result from an incomplete denominator.
- Potential gross income
- Rental income for the full calculation period before deducting vacancy and expenses. This is the upper limit of the model, not the owner's income.
- Effective income
- Potential income after adjusting for vacant periods, discounts, payment delays, and other realistic revenue losses.
- Net operating income
- Effective income after expenses borne by the owner: taxes, management, maintenance, insurance, and applicable building charges.
- Total entry cost
- The property's price together with acquisition costs, mandatory payments, furnishings, and other costs required to prepare it for the selected use scenario.
- Net return
- Net operating income compared with a complete and consistently defined investment base. Financing and property price appreciation should be analysed separately.
Full financial picture
Vacancy and ownership costs have a greater impact on the outcome than the advertised rate
The model should show not only income from the tenant, but also periods without income, regular payments, maintenance and costs that occur less than once a month.
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Allow for a realistic vacancy period between leases and time to prepare the property for the next tenant.
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Separate gastos comunes into the tenant’s payments and amounts that remain the owner’s responsibility under the contract or because of the nature of the work.
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Confirm applicable taxes and municipal payments with a contador for the specific owner and ownership structure.
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Consider management, tenant search, move-in, ongoing communication, and monitoring of the property’s condition.
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Include insurance, minor repairs, appliance replacements, and a reserve for more substantial work on the building or apartment.
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For a furnished property, include the initial furnishing and periodic replacement of furniture and equipment.
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Separately, check bank expenses, currency conversion, and remittance costs if they are relevant to your scenario.
Stability testing
Three scenarios show how much the outcome depends on assumptions
The numerical example Dēco 403 compares two entry bases. An investment decision requires a sensitivity model with the same formula and different assumptions about income and expenses.
Baseline scenario
Uses the confirmed rate, a typical lease-up period, and expected operating costs as of the calculation date. This is a working hypothesis, not a guaranteed forecast.
Conservative scenario
Checks for a longer vacancy, a rent concession, additional move-in or repair costs, and a more cautious estimate of net income.
Stress scenario
Combines a decline in effective income with rising costs and unforeseen repairs to assess the liquidity buffer and allowable entry price.
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Record source data
Specify the source and date for price, rent, vacancy, expenses, taxes and management.
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Define a single formula
In all scenarios, use one period, one entry base, and the same income and expense categories.
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Vary assumptions individually
First assess the impact of each parameter, then combine adverse changes in the stress scenario.
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Compare with your goal
Check whether the property can support your intended holding period, cash-flow needs, and a contingency reserve.
Model risks
Return cannot be measured separately from liquidity and management.
Two properties with similar calculated ROI may behave differently when tenants change, repairs are needed, the property is sold, or it is managed remotely.
Rental demand
The rental rate and time needed to find a tenant depend on the area, apartment type, condition, season, and competing supply.
Building costs
Major work, changes in common expenses, or an inadequate building reserve fund can reduce actual cash flow.
Remote management
An absent owner requires clear authority, reporting, oversight of contractors, and a reserve for urgent decisions.
Exit liquidity
The timing and price of a future sale are not known in advance; the base model should not substitute them with an assumed constant increase in value.
Currency and payments
The owner’s income, expenses, and personal obligations may be denominated in different currencies, creating a separate risk.
Rules and taxes
Tax status, contractual structure and applicable payments require up-to-date verification for the specific owner.
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