Gross Yield vs Net Yield: What Holiday Home Investors Actually Need to Know

Why gross yield is not enough

When evaluating a holiday home, gross yield is often the first number you see. It is simple: annual rental income divided by purchase price. But that figure is misleading — it ignores taxes, management fees, maintenance, and vacancy periods.

Net yield deducts all recurring costs and shows what you actually earn. It is the only reliable metric for comparing properties across different markets.

How to calculate net yield

Start with gross annual rental income. Subtract all recurring annual costs: property taxes, insurance, management fees, maintenance, HOA charges, accounting, and estimated vacancy. Divide the result by total acquisition cost (purchase price + notary + transfer tax + renovation).

Costs investors often forget

• Short-term rental management (15–25% of gross revenue)

• Maintenance reserves and HOA fees

• Seasonal vacancy (often underestimated by 10–20%)

• Local and regional taxes specific to each country

A real comparison: Barcelona vs Megève

An apartment in Barcelona might show 7.2% gross yield while a chalet in Megève shows 4.1%. After all costs, Barcelona net yield may fall to 3.8% while Megève stays around 3.5%. The gap narrows — and alpine assets often offer stronger long-term capital appreciation.

What Terrivio calculates for you

Terrivio automatically calculates net yield for any listing, incorporating local taxes, management fees, and regional vacancy rates. Paste a listing URL and get both yields in under 60 seconds.