Real Estate Return Calculator: Gross, Net, and Cash Flow

Rental yield measures what percentage of the purchase price is recouped each year through rental income. It is the key metric for comparing real estate investments with one another and against other investment alternatives.

Gross return is calculated by dividing the annual income by the purchase price. Net return is more realistic: it deducts purchase costs (property transfer tax or VAT, notary fees, registration fees) and operating expenses (homeowners’ association fees, property tax, insurance, maintenance) before dividing. Our calculator shows both, as well as monthly cash flow and the price multiplier.

As a general guideline: in prime areas such as Madrid or Barcelona, net returns of 2.5–4% are common, offset by strong appreciation. In medium-sized cities such as Valencia, Seville, or Zaragoza, yields range from 4 to 5.5 percent, and in secondary markets, they can exceed 5.5–7.5 percent, though with a higher risk of vacancies.

After-tax returns depend on your situation: rental income from your primary residence qualifies for a personal income tax reduction, and expenses such as 3% depreciation, mortgage interest, property tax, and insurance are tax-deductible. SmartLandlord ImmoCheck calculates the full tax impact of your investment. This information is for general guidance only and does not constitute tax advice.