In Belgium

Net yield is the most reliable measure of a rental investment’s actual financial performance. Unlike gross yield, it deducts all expenses and includes the full acquisition cost (purchase price + notary fees).

Formula: Net yield = ((Annual rent - Annual charges) / Total acquisition cost) x 100

Annual charges include: property tax, insurance, maintenance and repairs, management fees, vacancy provision, non-recoverable charges.

How it works

Calculation. Apartment purchased for 200,000 EUR + 25,000 EUR notary fees = 225,000 EUR total. Rent: 850 EUR/month = 10,200 EUR/year. Charges: property tax 900 EUR + insurance 300 EUR + maintenance 500 EUR + vacancy provision (1 month) 850 EUR + management 0 EUR = 2,550 EUR. Net yield = (10,200 - 2,550) / 225,000 x 100 = 3.4%.

The gap with the gross yield (5.1%) is 1.7 percentage points — a typical spread.

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Good to know
Net yield does not include the mortgage loan cost. To measure the actual cash return on your own invested capital, calculate the rental cash flow or cash-on-cash return, which accounts for the financing structure.

Practical example

Marc evaluates a studio in Leuven for 160,000 EUR (+ 20,000 EUR notary fees). Rent: 650 EUR/month. After deducting all charges (2,100 EUR/year), his net yield is (7,800 - 2,100) / 180,000 = 3.2%. He compares this with a savings account yielding 1.5% and concludes the premium justifies the effort and risk.

Key considerations

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Warning
Beware of “net yield” figures quoted by sellers or agents — they often exclude certain costs (vacancy, non-recoverable charges, major repairs). Always recalculate using your own conservative estimates.