Every argument about buying an apartment to rent out starts with the same number, and it is the wrong one.
In Kyiv in September 2026 the median one-bedroom on the secondary market sells for $68,500 and the median one-bedroom rents for UAH 19,000 a month — about $420. Twelve months of that rent against the purchase price gives a gross yield of 7.36%. Set beside a deposit or a coupon, 7.36% looks decisive, and most buying decisions stop there.
It should not. Gross rent is a revenue line, not a return. The comparison that matters puts the net rental yield against the net coupon, and once the deductions are applied the ranking changes.
What survives the deductions
The costs below are the ordinary ones a Kyiv landlord meets in a normal year, not a disaster scenario. The tax figures assume the common route — an individual entrepreneur on the third group, which is the cheapest legal way to declare rent in Ukraine. A private individual declaring rent outside that regime pays 18% income tax plus the 5% military levy, and the arithmetic gets worse, not better.
| Item | Annual |
|---|---|
| Gross rent, 12 months at $420 | $5,040 |
| One month vacancy between tenants | −$420 |
| Single tax, 5% of receipts | −$231 |
| Military levy, 1% of receipts | −$46 |
| Unified social contribution, UAH 1,902.34 a month | −$512 |
| Maintenance and depreciation, 1% of value | −$685 |
| Agency fee on tenant turnover, amortised | −$105 |
| Utilities and building fees while vacant | −$60 |
| Net income | $2,981 |
| Net yield on $68,500 | 4.35% |
Nothing in that table is aggressive. One vacant month a year is standard. One percent of the property value for maintenance is the number that lets an apartment be re-let at the same rent in year five as in year one; spend less and the rent drifts down instead.
And the table ignores the entry cost entirely: the 1% pension fund levy on purchase, the notary, the agent. Together they run to roughly 4% of the price — paid once, but paid before the first coupon-equivalent ever arrives.
What the same capital earns as a coupon
The same $68,500, in fixed income, on 3 September 2026:
| Instrument | Yield |
|---|---|
| US 2-year Treasury | 4.34% |
| US 10-year Treasury | 4.77% |
| US 30-year Treasury | 5.25% |
| ICE BofA US investment grade corporate index | 5.51% |
| ICE BofA US high yield index | 7.15% |
| Ukrainian USD-denominated OVDP | about 4.2% |
| Ukrainian hryvnia OVDP, 1 year (1 September auction) | 15.18% |
| Ukrainian hryvnia OVDP, 3 year (25 August auction) | 16.47% |
| Ukrainian corporate bonds, hryvnia | up to 18% |
The ten-year obligation of the United States government pays more than a Kyiv apartment nets its owner. Investment grade corporate credit pays 5.51% — 1.16% more than the apartment, in dollars, settling in a day, requiring no tenant, no plumber and no notary. High yield pays 7.15%: more than the apartment's gross yield, before a single deduction.
That is the whole case, and it is arithmetic rather than opinion.
The hryvnia instrument nobody prices properly
The most mispriced line in that table is the Ukrainian government bond. Hryvnia OVDP placed between 15.18% and 16.47%, and income from them carries no personal income tax and no military levy — the only instrument available to a Ukrainian retail investor where the state takes nothing.
Rent is taxed. Corporate bond coupons are taxed. Deposits are taxed. OVDP are not.
Against the NBU forecast of about 10% inflation for the end of 2026, a 15.5% coupon is a real return of roughly 5%. Against the hryvnia — which held near UAH 44.6 to the dollar through the year, with forecasts of UAH 45.5–46.7 by December — a full year of expected devaluation costs somewhere between 2% and 4.5%. Even at the pessimistic end, the dollar-equivalent return lands around 11%, against 4.35% net from the apartment.
The direction of travel
The static comparison is unflattering. The trend is worse.
Over the past year the median Kyiv one-bedroom rose about 5% in price, while the median one-bedroom rent fell 5% in hryvnia and 12% in dollars. Numerator down, denominator up: that is yield compression, and it is mechanical. Every month that combination persists, the buyer's entry yield gets thinner.
By district the fall is sharper than the median suggests — one-bedroom rents dropped 17% in Dniprovskyi and 11% in Shevchenkivskyi and Darnytskyi. Meanwhile the price spread across the city runs from $43,500 in Desnianskyi to $152,000 on Pechersk, a 3.5-fold range on the same nominal product.
What a coupon does not ask for
The yield gap is only part of it. The apartment also charges its owner in things that never appear in a yield calculation:
- Time. Tenants, viewings, repairs, disputes, tax filings. A bond has never once called about a leaking pipe.
- Concentration. $68,500 in one object, one district, one city, one jurisdiction, one currency of law. The same money buys twenty corporate credits across ten sectors.
- Liquidity. A listed bond settles in a day. A Kyiv apartment takes months to sell, and the last 5% of the price is normally left on the negotiating table.
- Optionality. Cash in liquid instruments can be redeployed when something breaks. Cash in an apartment cannot.
How I read it
The case for the coupon in September 2026 does not rest on the apartment being a bad asset. It rests on a comparison that landlords rarely run honestly: 7.36% gross against 5.51% net is not a comparison at all. The correct one is 4.35% against 5.51%, and on that line the apartment loses — while asking for work that the bond does not.
Which is not the end of the argument. Everything above prices the apartment as a bond, and an apartment is not a bond. Part 2 makes the opposite case, and it is stronger than this one looks.