How-to

How to Calculate True Net Yield on a European Vacation Rental

Gross yield is misleading. Here's a step-by-step framework that accounts for local taxes, management fees, and seasonal occupancy.

Fynn de Vries · 2026-03-20

Step 1: Gross annual revenue

Multiply average daily rate (ADR) by booked nights. Booked nights = 365 × occupancy rate. Use market comparables, not the seller’s projection.

Step 2: Subtract platform and operating costs

Deduct Airbnb/Booking commission (typically 15–20%), cleaning, management (15–25% of gross), maintenance reserves, insurance, utilities, and local taxes.

Step 3: Divide by total cash invested

Net yield = (annual cashflow after tax) ÷ (purchase price + acquisition costs). Acquisition costs in Spain often add 10–12%; in France 7–8%.

Benchmarks to target

Coastal Spain and Portugal: 3–5% net is solid. Alpine markets: 2.5–4% with lower volatility. Major capitals: 1.5–3% but stronger resale liquidity. Terrivio calculates all of this automatically from any listing URL.