SOBE Knowledge
Buy-to-Let Rental Yield Calculator
See the gap between headline gross yield and the net yield left after vacancy, running costs and the full cost of acquisition. Add financing to estimate monthly cash flow and cash-on-cash return.
The property
Resale: transfer tax (ITP) at the Andalusian rate, plus professional fees.
Calculated automatically and included in the net-yield denominator. These costs are not recovered on sale. Verify the exact figure for a specific transaction.
Rental income
Weeks the property is not producing rent during a full year.
Running costs
Leave at zero if self-managed. The fee is applied to rent actually received after vacancy.
Financing
The loan is applied to the purchase price. Acquisition costs and CapEx remain cash-funded.
This calculator shows estimates based on the assumptions entered. It does not promise or guarantee a return. Personal tax, financing approval and property-specific costs require professional verification.
Gross yield is the headline; net yield is the working number
Gross yield compares scheduled rent with price. Net yield asks what remains after vacancy, operating costs and the full investment needed to buy.
Gross yield is useful for a quick first comparison: annual rent divided by purchase price. It does not include empty weeks, community fees, local taxes, insurance, maintenance or management.
Net yield uses estimated net operating income and divides it by the purchase price plus acquisition costs and renovation or furnishing. That makes the denominator closer to the capital actually committed.
Why acquisition costs widen the gross-to-net gap
Purchase taxes and professional fees increase the investment basis without increasing the rent.
On a resale property, the model includes ITP at 7%, plus estimated legal, notary, registry and bank costs. A new build uses IVA at 10% and AJD at 1.2%, plus the same professional-cost assumptions. These amounts are part of the capital required and are not recovered on sale.
The result is deliberate: two properties with the same rent and purchase price can show different net yields if one requires more CapEx or a different acquisition-cost structure.
Cash flow and cash-on-cash answer a different question
Net yield measures the property before financing; cash-on-cash measures the annual cash left after debt service against the cash you actually invested.
With the mortgage box unticked, the model is a cash purchase and monthly cash flow is NOI divided by twelve. With financing switched on, the mortgage payment is deducted and the initial cash invested falls by the loan amount.
Leverage can increase or reduce cash-on-cash return depending on the interest rate, debt service and operating result. The calculator reports what the entered numbers show; it does not project or guarantee income.
Frequently asked questions
What is gross rental yield?
Gross rental yield is scheduled annual rent divided by the purchase price. It is a quick comparison metric and does not deduct vacancy, operating costs, acquisition costs or mortgage payments.
What is net rental yield?
Net rental yield is estimated annual net operating income divided by the full investment basis used here: purchase price, automatic acquisition costs and renovation or furnishing. Mortgage payments are excluded because net yield measures the property before financing.
Why is net yield lower than gross yield?
Vacancy and running costs reduce the income numerator, while acquisition costs and CapEx increase the investment denominator. Both effects widen the gap between gross and net yield.
Are acquisition costs included?
Yes. The calculator automatically estimates ITP for a resale or IVA plus AJD for a new build, together with legal, notary, registry and bank costs. They are included in the net-yield investment basis and labelled as not recovered on sale.
What is monthly cash flow after mortgage?
It is estimated monthly net operating income less the calculated monthly mortgage payment. It is shown before personal income tax and can be negative when debt service is higher than the property cash generated.
What is cash-on-cash return?
Cash-on-cash return is estimated annual cash flow after mortgage divided by the cash invested: purchase price plus acquisition costs and CapEx, less the initial loan. It is financing-sensitive and is not the same as net yield.
Are non-resident taxes included in the headline yields?
No. The headline yields and cash flow are shown before personal tax. The PDF includes a 2026 EU/EEA versus non-EU reference table with estimated annual rental-tax amounts for the entered scenario.
Related
Use the yield result as one part of a wider purchase, financing and tax review.
General information only — not financial, tax or legal advice, not a valuation, not a forecast and not an offer. Results depend entirely on the assumptions entered and are estimates before personal tax. Rental performance, financing terms, acquisition costs and tax treatment vary by property and circumstance; verify current figures with qualified professionals before making a decision.