Rental yield is the single number that tells you how hard a property works for the money you put into it. Price tells you what you paid. Yield tells you what you get back. Two flats on the same street can carry the same price tag and return wildly different yields — and that gap is where good and bad investments separate.
In short: rental yield is annual rent expressed as a percentage of a property's price. Gross yield ignores costs; net yield subtracts them first. A €250,000 flat let at €1,100/month returns 5.3% gross but about 4.0% net once €3,200 of yearly costs come out — and net is the figure to judge a property on.
Gross yield
Gross yield is the blunt version. Annual rent divided by purchase price, times 100.
Gross yield = (annual rent ÷ property price) × 100
A €250,000 flat let at €1,100 a month earns €13,200 a year. That's a 5.3% gross yield. It's the figure most listings quote, because it's the most flattering — it ignores every cost between the tenant's payment and your bank balance.
Use gross yield for one thing: a fast first filter when you're comparing many properties. Never use it to decide.
Net yield
Net yield is the honest version. It subtracts the costs of actually owning and running the place before dividing by price.
Net yield = ((annual rent − annual costs) ÷ property price) × 100
Annual costs typically include:
- Management or letting fees
- Insurance and service charges
- Maintenance and repairs
- Property taxes and licensing
- Void periods — the weeks between tenants when rent is zero
On that same €250,000 flat, knock off €3,200 of annual costs and your net yield drops to 4.0%. That 1.3-point gap is the part that pays your mortgage, not the part the listing advertised.
"Gross yield sells the property. Net yield tells you whether to buy it." — PropFlow
What counts as a good yield?
There's no universal number — it depends on the market, the financing, and your goal.
| Yield band | Typical read |
|---|---|
| Below 3% | Likely a capital-growth play, not income |
| 3–5% | Stable, lower-risk, mature markets |
| 5–8% | The income sweet spot for most landlords |
| Above 8% | Higher return, usually higher risk or work |
A city-centre flat might yield 3% but double in value over a decade. A regional terrace might yield 8% with flat prices. Neither is "better" until you know whether you're buying for income or growth.
Key takeaways
- Gross yield = annual rent ÷ price; net yield subtracts running costs first.
- The gap between the two is the part that actually pays your mortgage.
- 5–8% net is the income sweet spot for most landlords; below 3% is usually a growth play.
- Judge every property on net yield, using real costs — never the listing's gross.
Run your numbers
Don't estimate yield in your head. Plug a real price, rent, and cost figure into the rental yield calculator and compare properties on net yield, not the listing's gross.
Once a property is in your portfolio, PropFlow tracks the rent you actually collect against the costs you actually pay — so the yield you see is the yield you're earning, not the one you hoped for.
If the next step is tracking that yield across more than a couple of units, compare the PropFlow plans before the spreadsheet starts making the decisions for you.