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How to calculate the real yield of a rental in 2026
· 6 min read
Practical guide for owners: gross yield, net yield and return on capital employed, with an applied example for a home in Spain.
When an owner asks 'how much can I get from this flat?', there's no single right answer: there are three numbers to look at together.
1. Gross yield
Annual rental income divided by the property price. It's the easiest figure to calculate and the most quoted in headlines. Useful to compare opportunities at first glance, but misleading on its own.
2. Net yield
We subtract real costs: property tax, building fees, insurance, maintenance, vacancy periods and management fees. The result is usually 30-40% lower than gross. This is the figure that ends up in your pocket.
3. ROCE (return on capital employed)
With financing, return on equity invested rises sharply — and so does risk. Both must be measured.
A real example
- Flat price: €180,000
- Monthly rent: €850 (€10,200/year)
- Gross: 5.67%
- Annual costs (IBI, community, insurance, maintenance, 4% vacancy): €2,450
- Net: 4.30%
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