Rental Yield Calculator: Gross & Net Rental Yield for Your Property Investment
Calculate the rental yield of your property investment in Germany: free, up to date for 2026 and with an instant traffic-light rating. Gross rental yield, net rental yield and price-to-rent multiple at a glance.
Last updated: February 2026
Enter a purchase price and a net rent to calculate the rental yield instantly.
What is rental yield?
Rental yield (Mietrendite) shows what percentage of the invested capital a let property generates each year through rental income. It is the most important metric for property investors when first assessing a property as an investment.
Important: the rental yield is an indicator of ongoing earning power. It accounts for neither capital appreciation, nor tax advantages (depreciation, AfA), nor the leverage effects of debt financing. For a complete investor analysis, these factors have to be considered as well.
There are two variants: the gross rental yield (a simple, quick comparison metric) and the net rental yield (a more realistic metric that accounts for the actual costs). Both are explained in the following section.
Gross vs. net rental yield: the key difference
Gross rental yield
The simplest calculation: annual net rent ÷ purchase price × 100. It is well suited for a quick comparison of several properties, but is unrealistic because it ignores both the closing costs (Kaufnebenkosten) and the ongoing non-recoverable costs.
Example: at a purchase price of €250,000 and €800 net rent per month, this gives (€9,600 ÷ €250,000) × 100 = 3.84% gross rental yield.
Net rental yield
The more realistic metric: (annual net rent − non-recoverable costs) ÷ (purchase price + closing costs) × 100. It accounts for the actual amount invested (the total investment) and the real ongoing costs you bear as a landlord.
The net rental yield is typically 1.5–3 percentage points below the gross rental yield. As a rule of thumb: use the gross rental yield for the short-list, and the net rental yield for a serious purchase decision.
The price-to-rent multiple (Kaufpreisfaktor): what does it tell you?
The price-to-rent multiple indicates after how many years the rental income has fully recouped the purchase price, excluding costs and capital appreciation. Calculation: purchase price ÷ annual net rent.
Multiple below 20: Attractive, typical of rural areas and secondary/tertiary locations.
Multiple 20–25: Average, many mid-sized cities.
Multiple 25–30: Expensive, major cities, good locations.
Multiple above 30: Very expensive: München, prime locations in Hamburg/Frankfurt/Berlin.
A low price-to-rent multiple does not automatically mean a good investment. Vacancy risk, the need for maintenance and the location's development have to be taken into account as well.
What rental yield is good? Guidance for 2026
| Gross rental yield | Rating | Typical locations |
|---|---|---|
| < 3% | Low | München city centre, Hamburg Elbvororte, prime locations in Frankfurt |
| 3–5% | Average | Major cities (Berlin, Köln, Düsseldorf), good locations in mid-sized cities |
| 5–7% | Good | Mid-sized cities, secondary locations in major cities, up-and-coming areas |
| > 7% | Very good | Smaller towns, rural areas, properties in need of renovation |
Caution: a very high rental yield (above 8%) can also point to risks: vacancies in the region, a declining population, a high need for renovation or a problematic tenant structure. Always check the reasons for the low purchase price.
Current interest-rate situation (approx. 3.5–4% debit interest, as of 2026): yields below 4% become problematic with debt financing, because the monthly cash flow turns negative. Anyone buying on credit should aim for at least a 5% gross rental yield.
Non-recoverable costs: what landlords actually pay
Not all costs can be passed on to the tenant via the service-charge statement. These “non-recoverable” costs reduce the actual yield and should be taken into account in every investor calculation.
Maintenance reserve
Approx. €1.00–1.50/m²/month (more for older buildings). The Peters formula serves as a reference: approx. 1.5% of construction costs per year, spread over 80 years.
Property management (WEG)
€25–40/month per residential unit. For larger condominium-owners' associations (WEG), the cost per unit tends to be lower.
Rent-default allowance
2–4% of the annual net rent: a notional buffer for vacancies between tenants and for rent default.
Non-recoverable operating costs
Bank account fees, administrator costs for separately owned units and other costs that are not listed in the Operating Costs Ordinance (Betriebskostenverordnung).
Rule of thumb: budget for 15–25% of the annual net rent as non-recoverable costs. In our calculator above you can enter the exact monthly amount.
Rental yield by city and region: 2026 comparison
The table below shows average gross rental yields for selected German cities and regions (2026 guide values).
| City / region | Ø purchase price/m² | Ø net rent/m² | Ø gross rental yield |
|---|---|---|---|
| München | ~€9,500 | ~€21 | ~2.7% |
| Hamburg | ~€6,500 | ~€15 | ~2.8% |
| Frankfurt | ~€6,000 | ~€16 | ~3.2% |
| Berlin | ~€5,000 | ~€14 | ~3.4% |
| Köln | ~€4,500 | ~€13 | ~3.5% |
| Leipzig | ~€3,000 | ~€9 | ~3.6% |
| Dortmund | ~€2,500 | ~€9 | ~4.3% |
| Chemnitz | ~€1,200 | ~€6 | ~6.0% |
The values are averages and vary considerably depending on location, year of construction and condition. Use our calculator above for your specific property.
Increasing the rental yield: 5 strategies for investors
- Negotiate the purchase price. Every euro less on the purchase price increases the yield directly. There is particular room to negotiate when a property has been marketed for a while (over 3 months). Analyse the listing history and use objective arguments.
- Minimise the closing costs. Buying without an agent saves up to 3.57% in closing costs. The federal state also matters: Bayern has the lowest property transfer tax at 3.5%.
- Raise the rental potential. Renovation, furnished letting or short-term letting can enable significantly higher rents. This is the value-add strategy: buy cheaply, upgrade, let at a higher rent.
- Reduce non-recoverable costs. Compare and, if necessary, switch property managers (WEG). Check the maintenance reserve for appropriateness. Minimise vacancies through good tenant selection and attractive fittings.
- Choose a location with potential. Up-and-coming secondary and tertiary locations offer higher initial yields and additional appreciation potential. Watch the population trend, infrastructure projects and the region's economic strength.
Rental yield vs. return on equity: what really counts?
The rental yield looks at the total investment. The return on equity accounts for the leverage effect of financing and is the more decisive metric for most investors, because it shows the return on the equity you actually put in.
Worked example
Property: €200,000 purchase price, 10% closing costs (€20,000), €800 net rent/month.
Financing: 80% (€160,000 loan at 3.5% debit interest), equity: €60,000 (€40,000 + €20,000 closing costs).
Annual net rent: €9,600 − €1,800 non-recoverable = €7,800 net income.
Annual interest: €160,000 × 3.5% = €5,600.
Cash flow before repayment: €7,800 − €5,600 = €2,200/year.
Return on equity: €2,200 ÷ €60,000 = approx. 3.7%, considerably better than the net rental yield of approx. 3.5%.
The leverage effect only works, however, when the net rental yield is above the cost of debt. Otherwise the effect turns negative and the property “eats” money. For a complete investor analysis with cash flow, tax effects and capital appreciation, dedicated cash-flow and depreciation (AfA) calculators are worthwhile.
Frequently asked questions about rental yield
Rental yield (Mietrendite) indicates what percentage of the invested capital a let property generates each year through rental income. It is a key metric for the initial assessment of a property as an investment. There are two variants: gross rental yield (simplified) and net rental yield (realistic).
The formula: gross rental yield = (annual net rent ÷ purchase price) × 100. Example: at a €250,000 purchase price and €800 net rent per month, this gives (€9,600 ÷ €250,000) × 100 = 3.84% gross rental yield. This metric is well suited for a quick comparison of several properties.
The gross rental yield simply divides the annual net rent by the purchase price, ignoring incidental costs. The net rental yield is more realistic: it deducts non-recoverable costs (maintenance, management, rent default) from the rent and includes the closing costs (Kaufnebenkosten) in the total investment. The net rental yield is typically 1.5–3 percentage points below the gross rental yield.
As a rule of thumb: a gross rental yield from 5% is good, from 7% very good. In major German cities such as München (approx. 2.7%) or Hamburg (approx. 2.8%) such figures are barely achievable; there the focus is more on capital appreciation. In mid-sized cities and secondary locations 4–6% is realistic. What matters most is always the net rental yield relative to current financing rates.
The price-to-rent multiple (Kaufpreisfaktor) shows after how many years of rent the purchase price is recouped. A multiple below 20 is considered attractive, 20–25 average, above 25 expensive. In München the multiple is often above 35, in smaller towns 15–20. The lower the multiple, the higher the rental yield.
Non-recoverable costs are expenses you bear as a landlord and cannot pass on to the tenant via the service-charge statement: the maintenance reserve (approx. €1–1.50/m²/month), property management (€25–40/month), the rent-default allowance (2–4% of the annual net rent) and non-recoverable operating costs. As a rule of thumb, budget for 15–25% of the annual net rent.
The rental yield should at least cover the financing costs. With current debit interest rates of around 3.5% (as of 2026), the net rental yield should be at least 3.5–4% so that the cash flow does not turn negative. Many investors set a minimum gross rental yield of 5%. If the yield is well below that, the strategy must rely on capital appreciation.
Very high rental yields (above 8%) can point to risks: vacancies in the region, a declining population, a high need for renovation, a poor location or a problematic tenant structure. A conspicuously low purchase price usually has a specific reason. So always check the location, condition and lettability, not just the figure.
The rental yield relates to the total capital invested (purchase price + incidental costs). The return on equity accounts for the leverage effect of financing and shows the return on the equity you have actually put in. With debt financing, the return on equity can be significantly higher than the rental yield (positive leverage effect), but also negative if the interest exceeds the rental income.
Yes, through several levers: (1) negotiate the purchase price, especially on properties that have been on the market for a while; (2) buy without an agent, which saves up to 3.57% in closing costs; (3) raise the rental potential through renovation or furnished letting; (4) reduce non-recoverable costs, for example by comparing management costs and minimising vacancies; (5) choose an affordable location, since secondary and tertiary locations often offer higher initial yields.
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