Rental yield (gross vs. net)
Real estateThe rental yield puts annual rental income in relation to the market value of the property. It is the key metric for assessing an investment property.
Example:Apartment with a market value of €280,000, €850 net cold rent, €350 running costs (service charges + maintenance + property tax + management): gross = 3.6% · net = 2.1%
Classification:Gross yields of 3–5% are considered solid, >5% above average. Net yields are typically 1–2 percentage points lower.
Pre-tax metric:Both values are pre-tax yields. Rental income is subject to income tax under §21 EStG (not the flat withholding tax) and taxed at your personal tax rate. Financing interest reduces the tax burden but is not included in this yield metric.