How the yield of a holiday home is calculated
Gross yield is the simple headline number: annual rental revenue divided by the purchase price. Net yield is the number you actually live on: net operating income (revenue minus all operating costs) divided by the total investment, including acquisition costs.
Annual revenue for a short-term rental is nightly rate × booked nights. Booked nights = 365 × occupancy. A €135 nightly rate at 60% occupancy gives 219 nights and about €29,500 of revenue.
- Gross yield = annual revenue ÷ purchase price
- NOI = annual revenue − variable costs − fixed costs
- Net yield = NOI ÷ (purchase price + acquisition costs)
- Break-even occupancy = (fixed costs ÷ (nightly rate × (1 − variable cost %))) ÷ 365
Costs you must include
Variable costs scale with revenue: platform commission (3–15%), cleaning that is not recharged to guests, management (15–25% if outsourced) and consumables. Fixed costs run whether you book or not: insurance, utilities, internet, property tax, HOA fees, maintenance reserve and accounting.
- Acquisition costs: 2–15% of the price depending on country (transfer tax, notary, registry, agent)
- Variable costs: typically 20–30% of revenue for a self-managed rental, 35–45% fully managed
- Fixed costs: often €3,000–7,000 a year for a two-bedroom apartment
- Tourist tax and VAT where applicable — not income, but they affect your competitive price
What is a good yield for a holiday home in Europe?
Across the 13 countries Terrivio covers, realistic net yields for well-located holiday rentals sit between 2% and 5%. Above 5% net usually means either a secondary location, heavy self-management, or a regulatory risk the market is pricing in. Below 2% you are buying for capital growth or personal use, not for income.
Compare net yield against your financing rate: if your mortgage costs 3.5% and the property nets 3%, leverage destroys value. Terrivio's full analysis adds 10-year IRR and DSCR to make this explicit.
From calculator to real data
A calculator is only as good as its inputs. Terrivio replaces guesses with market data: paste a listing URL from Idealista, Funda, Rightmove, ImmoScout24 or 40+ other portals and the pipeline pulls segment-level nightly rates and occupancy, applies the correct acquisition costs and tax regime for the country, and scores regulatory risk for the exact city.
How to calculate the yield of a vacation rental
- Estimate annual revenue. Multiply the realistic average nightly rate by 365 × occupancy. Use market comparables, not the seller's projection.
- Subtract operating costs. Deduct platform fees, cleaning, management, utilities, insurance, property tax and a maintenance reserve to get NOI.
- Add acquisition costs to the price. Include transfer tax, notary, registry and agent fees — 2–15% depending on the country.
- Divide NOI by total investment. The result is net yield. Compare it with your financing rate and with alternatives before you buy.
Frequently asked questions
What is the difference between gross and net yield?
Gross yield divides annual revenue by the purchase price and ignores costs. Net yield divides net operating income by the total investment including acquisition costs. Net yield is typically 40–60% lower than gross.
Does the calculator include a mortgage?
No. It shows pre-financing returns so you can decide your own leverage. Terrivio's full report adds DSCR and cash-on-cash return for a given loan.
What occupancy should I assume?
European holiday rentals typically achieve 45–70% annual occupancy depending on location and seasonality. Use market data for the segment rather than a listing's claimed calendar.
Is this calculator free?
Yes. The calculator on this page is free and works without an account. The full Terrivio analysis of a specific listing requires a plan.