Rental yield of a flat
Gross and net yield, annual cash flow and return on equity.
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Result
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Calculation version: finance@1.0.0. The calculation runs in your browser: we don't send or store the amounts you enter. We only count, without identifying you, that the tool has been used.
How to use it
- 1Include in purchase costs the taxes and fees that apply to you.
- 2Vacancy is the percentage of the year the property will be empty.
- 3If you buy with a mortgage, fill in the financing to see the cash flow.
How it calculates
- Gross yield = annual rent / purchase price
- Effective rent = annual rent × (1 − vacancy)
- Net yield = (effective rent − annual expenses) / (price + purchase costs + refurbishment)
- Cash flow = effective rent − annual expenses − annual mortgage payments
- Return on equity = cash flow / (total investment − mortgage)
Verifiable example
A €150,000 flat, €15,000 of purchase costs, €5,000 of refurbishment, €900/month, 5% vacancy and €1,500 of expenses: gross 7.20%, net 5.15%.
Limitations
- Yields before the owner's income tax.
- It doesn't include appreciation or capital gains on sale.
- An advertised rent isn't an effective rent.
What the paid levels will add
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Indicative result
It doesn't constitute financial, tax or investment advice. Check important decisions with a professional.