Gross yield vs net yield: the formulas
Gross yield = Annual rent / Total price x 100 (no charge deduction). Net yield = (Annual rent - Annual charges) / Total price x 100. The gap between the two is 1 to 2 points on average in Belgium. Gross yield is for comparison; net yield is for decision-making.
The two indicators serve different needs in investment analysis:
| Aspect | Gross yield | Net yield |
|---|---|---|
| Charges included | None | All (property tax, insurance, vacancy, maintenance) |
| Complexity | Simple (2 variables) | Complete (5 to 10 variables) |
| Precision | Approximate | Realistic |
| Use | First screening | Investment decision |
Gross yield is useful for a first comparison between properties in different cities. Net yield is essential for evaluating actual profitability before committing.
Comparative example
Two properties to compare:
| Element | Property A (Brussels) | Property B (Namur) |
|---|---|---|
| Total price (fees included) | 300,000 EUR | 180,000 EUR |
| Annual rent | 10,800 EUR | 9,600 EUR |
| Gross yield | 3.6% | 5.3% |
| Annual charges | 3,500 EUR | 2,800 EUR |
| Net yield | 2.4% | 3.8% |
Property B (Namur) shows higher gross and net yields. However, cash flow and vacancy risk must also be considered for a complete decision.
Use our profitability simulator to automatically calculate both gross and net yield for your project, with all charges pre-filled.
When to use each indicator
Use gross yield to:
- Quickly compare properties during the search phase
- Filter listings (eliminate properties below a certain threshold)
- Communicate simply about a property’s performance
Use net yield to:
- Make the final investment decision
- Compare with other investments (savings, bonds, stocks)
- Assess the property’s ability to self-finance
- Estimate taxable income
Some sellers or estate agents only communicate gross yield, which is always more flattering. Always demand the charge breakdown to calculate net yield. Hidden costs can represent 25 to 40% of annual rent.
Regional specifics
Brussels-Capital Region
In Brussels, the gap between gross and net yield is larger due to higher property taxes and co-ownership charges. The Ordinance of 27 July 2017 can also generate compliance costs.
Wallonia
In Wallonia, the gross/net gap is generally smaller as charges are proportionally lower. The Decree of 15 March 2018 governs leases without major impact on operating costs.
Flanders
In Flanders, EPC standards under the Flemish Housing Rental Decree of 9 November 2018 can generate additional compliance costs that widen the gap between gross and net yield. Registration duties of 12% for investment properties impact total price and therefore gross yield.
Article 7 of CIR 1992 — real estate income. Registration duties: FPS Finance.