Calculate rental yield: formulas and example
Rental yield shows how much rent a property brings relative to its cost. It helps compare properties. It is no substitute for full planning.
Gross rental yield
Annual base rent divided by purchase price, times 100. Example: 900 € base rent per month is 10,800 € per year. At a 250,000 € price that gives 4.32 %.
Net rental yield
Annual base rent minus costs not passed on to the tenant, divided by purchase price plus purchase costs. With 1,200 € costs and 10 % purchase costs: 9,600 € divided by 275,000 € is 3.49 %.
Price-to-rent multiple
Purchase price divided by annual base rent: 250,000 € divided by 10,800 € is 23.15. The lower, the higher the yield.
What is often forgotten
- Purchase costs such as notary, transfer tax and agent.
- Reserves for repairs and vacancy between two tenants.
- Taxes on rental income and interest on financing. Neither is included here.
Example calculation, not investment or tax advice. Taxes, financing, vacancy and maintenance are not included. Updated: November 2026