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Decoding Rental Yields: The Difference Between Gross, Net, and Net-Net ROI
Master real estate underwriting: accounting for co-ownership fees, vacancy buffers, property taxes, and asset management expenses.
Discipline: Financial Analysis • February 27, 2026
Decoding Rental Yields: The Difference Between Gross, Net, and Net-Net ROI
Advertising brochures frequently boast high “Gross Yields” that disguise the true economic return of an investment property.
1. Gross Yield Formula
$$\text{Gross Yield} = \frac{\text{Annual Rent}}{\text{Total Purchase Price}} \times 100$$ While easy to calculate, it neglects every real-world operating expenditure.
2. True Net-Net Yield (Rentabilité Nette-Nette)
Deducting building service charges (charges de copropriété), property insurance, property tax (taxe foncière), management agency fees (typically 6%–8%), and personalized income taxes reveals the actual cash return in your bank account.