Net yield formula
Net yield = net operating income ÷ total investment. NOI is annual revenue minus every recurring operating cost. Total investment is the purchase price plus acquisition costs and any renovation or furnishing needed before the first booking. Dividing by the asking price alone overstates the yield by the size of those costs.
- Revenue: €30,000 · operating costs: €12,000 → NOI €18,000
- Price €300,000 + 10% acquisition costs → total investment €330,000
- Net yield = 18,000 ÷ 330,000 = 5.5% (gross yield would show 10%)
Acquisition costs by country (orientation, 2026)
The single biggest reason net yields differ between countries with similar rents is purchase cost. Orientation values for a non-owner-occupied property:
- Belgium ≈14% · Spain ≈12% · Germany, Austria, Italy ≈10%
- Netherlands ≈9.5% (8% transfer tax since 2026) · France, Portugal, UK, Luxembourg ≈8%
- Switzerland, Czechia ≈4% · Denmark ≈2%
Operating cost checklist
Missing a cost line is the most common way investors overstate net yield. Walk through every item, even if the amount is small.
- Property tax and municipal levies · building insurance and liability cover
- Utilities and internet (paid by you in short-term letting) · HOA / service charges
- Management or co-host fees · cleaning not recharged · linen and consumables
- Maintenance reserve (1–1.5% of value per year) · accounting and licence fees
What Terrivio adds
Terrivio applies the exact acquisition cost table and tax regime for each of 13 countries, pulls market revenue for the property segment and computes net yield, NOI, cashflow, break-even occupancy, DSCR and 10-year IRR for any listing URL — deterministic maths, no AI in the numbers.
How to calculate net rental yield
- Determine annual revenue. For short-term rentals use ADR × 365 × occupancy; for long-term use 12 × monthly rent minus expected vacancy.
- List every operating cost. Taxes, insurance, utilities, management, cleaning, maintenance reserve, accounting. Subtract to get NOI.
- Compute total investment. Purchase price + transfer tax + notary + registry + agent + renovation and furnishing.
- Divide and compare. Net yield = NOI ÷ total investment. Compare with your mortgage rate and with alternative markets.
Frequently asked questions
What is a good net rental yield?
For European residential and holiday property, 3–5% net is typical for good locations; 5–7% is strong and usually comes with more risk or work; below 2.5% is a capital-growth play.
Should I include the mortgage in net yield?
No. Net yield is a property metric independent of financing. Use cash-on-cash return or DSCR to evaluate a specific loan.
Why is my net yield lower than the agent's figure?
Agents usually quote gross yield on the asking price. Adding acquisition costs to the denominator and all operating costs to the numerator commonly halves the number.
Does Terrivio calculate net yield automatically?
Yes. Paste a listing URL and Terrivio computes net yield with country-specific acquisition costs, market revenue data and a full operating cost model.