Net rental yield (Nettomietrendite) measures your actual income after deducting all operating expenses. It's a more accurate measure of property profitability than gross yield.
The Formula
Net Yield = (Annual Rent − Operating Expenses) / Purchase Price × 100
Operating expenses typically include: property management, maintenance, insurance, property tax, vacancy reserves
Real Example: Gross vs. Net Yield
€450,000 Property:
Net yield is 1.6 percentage points lower than gross yield
Typical Operating Cost Percentages
- New properties: 15-20% of gross rent
- Existing properties: 25-35% of gross rent
- Older properties: 35-45% of gross rent
Why Net Yield Matters More
Don't fall for the gross yield trap
A property advertising "6% gross yield" might deliver only 3.5% net yield after expenses. Always calculate net yield before comparing investments. Properties with high gross yields often have higher operating costs.
Comparing to Other Investments
Net rental yield alone doesn't tell the whole story for real estate. Remember to add:
- Appreciation (3-4% annually in major cities)
- Tax savings from AfA and deductions
- Mortgage paydown (equity building)
- Leverage effects amplifying returns