Current for 2026•As of: July 2026

Rental Yield Calculator 2026 Gross & Net Yield.

Calculate gross and net rental yield, return on equity and monthly cash flow for your property – including the purchase price multiplier

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Property

€
50,000 €2,000,000 €
€
200 €5,000 €

Ongoing costs

€/month
0 €/month300 €/month
0.5% of purchase price 3.0% of purchase price
%
0 %15 %
€/month
0 €/month100 €/month

Financing

%
0 %100 %
%
1.0 %8.0 %
%
1.0 %5.0 %

Yield benchmarks

  • Gross rental yield: 4-6% = good
  • Net rental yield: from 4% = good
  • Purchase price multiplier: below 20 = cheap
  • Positive cash flow = self-sustaining

Net rental yield

2.68%

Mediocre

Gross rental yield

4.09%

Net rental yield

2.68%

Monthly cash flow

-377 €

Yield metrics

Gross rental yield4.09%
Net rental yield2.68%
Return on equity-8.59%

Monthly cash flow

-377 €

Negative cash flow – you need to contribute money each month.

Purchase price multiplier

Years of rent23.1x
Average (20-25 years)

Monthly overview

Rental income (net)+873 €
Expenses (costs + installment)-1,250 €
Cash flow-377 €

Annual overview

Gross annual rent10,800 €
Less vacancy10,476 €
Operating costs-3,400 €
Net income7,076 €
Debt service-11,605 €
Annual cash flow-4,529 €

Notes

  • Negative cash flow: you need to contribute about €377 per month.

Calculation based on:

  • Gross rental yield = annual rent / total investment
  • Net rental yield = net income / total investment
  • Return on equity = cash flow / equity (leverage effect)
  • A purchase price multiplier below 20 is considered cheap
  • Pre-tax view: depreciation, capital gains tax and speculation period (§ 23 EStG) are not taken into account

Important note

These calculations are for non-binding information only and do not replace professional tax advice. All information without guarantee. Learn more

Sources & calculation basis

Our calculations are based on the following official sources (as of: July 2026):

Related guides

Renting vs. Buying

Calculating rental yield: the key metrics

The rental yield is the key metric for property investors. It shows how profitable a rental is in relation to the investment. Our calculator distinguishes between gross and net rental yield.

In addition, we calculate the return on equity, which — due to the leverage effect of debt financing — can turn out significantly higher (or lower) than the property yield itself.

The most important yield metrics

Gross rental yield
Annual rent ÷ purchase price. Simple first indicator, without costs.
Net rental yield
Net income ÷ purchase price. Accounts for all ongoing costs.
Return on equity
Cash flow ÷ equity. Shows the leverage effect of debt financing.
Purchase price multiplier
Purchase price ÷ annual rent. Below 20 years = cheap, above 25 = expensive.

Example calculation: €250,000 apartment, €900 rent

Yield calculation (North Rhine-Westphalia)

Yield calculation (North Rhine-Westphalia)
ItemAmount
Purchase price€250,000
Incidental purchase costs (approx. 8.5%)€21,250
Total investment€271,250
Annual rent (gross)€10,800
Gross rental yield4.0%
Operating costs-€3,000
Net rental yield2.9%

These costs are often underestimated

  1. Maintenance: Approx. 1-2% of the purchase price per year. For older properties rather 2-3%.
  2. Vacancy: Budget 2-5% rent loss for tenant turnover and renovation.
  3. Non-recoverable costs: Management, property tax, reserves – these costs are borne by you as the landlord.
  4. Incidental purchase costs: 8-15% of the purchase price for real estate transfer tax, notary, agent – often forgotten!

The leverage effect in property investment

The leverage effect arises from debt financing. If the rental yield is higher than the loan interest rate, it amplifies your return on equity – in both the positive and the negative case.

Leverage example: 80% financing (NRW, 2% repayment)

Leverage example: 80% financing (NRW, 2% repayment)
ItemAmount
Equity€54,250
Debt financing (80%)€217,000
Net rental yield of property2.9%
Loan interest rate3.5%
Annual cash flow€-4,135 (negative!)

Note: At current interest rates and purchase prices, positive cash flow is barely achievable in major cities. Many investors are betting on appreciation in value rather than ongoing yield.

Frequently asked questions about rental yield

Everything important about gross, net and equity yield

The gross rental yield is the annual (cold) rent divided by the total investment (purchase price including incidental costs) × 100. It gives a quick first indication but does not account for ongoing costs such as maintenance or management. As a rule of thumb, the gross rental yield should be at least 4–5% to cover ongoing costs.

The net rental yield is calculated from the net income (annual rent minus all non-recoverable operating costs) divided by the total investment × 100. Typical costs: maintenance 1–2% of the purchase price, management around 5% of the rent, vacancy 2–5%, property tax. The net rental yield is the more meaningful metric.

The purchase price multiplier shows how many years of net cold rent the purchase price corresponds to. Below 20 is considered cheap (equivalent to a gross rental yield above 5%), 20–25 is typical for the market, above 25 is expensive. In German major cities the multiplier is currently often between 25 and 35 – meaning yields below 3%.

The return on equity shows how profitable the equity invested is. It is calculated from the annual cash flow (after the loan installment) divided by the equity invested × 100. Through the leverage effect, the return on equity can be far higher than the property yield itself – provided the loan interest rate is below the rental yield.

If the net rental yield is above the loan interest rate, debt financing amplifies the return on equity. Example: 4% net rental yield, 3% loan interest rate, 80% debt financing → return on equity well above 4%. Conversely, the leverage works negatively when interest rates rise or rental income falls. At current interest levels (3.5–4.5%), positive cash flow is hard to achieve in metropolitan areas.

Incidental purchase costs increase the total investment and thereby reduce the yield. Typical costs: real estate transfer tax 3.5–6.5% depending on the federal state, notary and land registry costs around 1.5–2%, real estate agent commission 0–3.57% (often split). In total 8–12% of the purchase price – an often underestimated yield killer.

A property is self-sustaining when the monthly cash flow is positive or at least zero – meaning the rental income covers all ongoing costs and the loan installment. At a financing interest rate of 3.5–4% and purchase price multipliers above 25, positive cash flow without a high equity contribution is barely achievable. The rental yield calculator shows you immediately whether your investment is self-sustaining.

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