Gross yield is not the return you keep
Compare rent, time without tenants, running costs and money left after loan payments.
Start with the rent. Then count the costs.
Gross yield is scheduled annual rent divided by purchase price, before costs. Operating yield allows for time without rent (vacancy) and running costs, but is before loan payments and rental-income tax.
Return on cash invested (cash-on-cash) compares the first year’s money left after running costs, financing and modelled taxes with the initial cash you put in. It excludes the final sale. A high gross yield can still leave you needing to top up the property’s costs each month.
Computed example, not a property listing
Fictional mainland Aveiro scenario: purchase €250,000.00, tax value €150,000.00, gross monthly rent €1,400.00, financing 70%, annual interest 3.5%, term 30 years; holding period 10 years.
Tax resident, investment acquisition on 2026-09-12; no young-buyer relief; vacancy 5%, effective tax rate on net rental income 25%.
Operating yield on total acquisition cost: 5.17%
Rent, appreciation and interest are editable assumptions, not forecasts. The downside reduces rent by 10%, increases vacancy by 5 percentage points and interest by 2 points, reduces appreciation by 2 points and adds a €1,000 annual repairs allowance. See the complete assumptions in the interactive example.
The free tools are simplified starting points. The full calculator lets you adjust costs, financing, taxes and timing, then compare scenarios for a more detailed analysis. Open the calculator
Educational estimates, not financial, legal, tax or investment advice. Methodology and sources