Monthly net cold rent times twelve, divided by the purchase price, times 100. Service charges the tenant pays do not belong in the cold rent. Purchase costs stay out of the gross figure.
Rental Yield Calculator for Germany
This rental yield calculator compares a year of cold rent with the purchase price of a property in Germany. Switch between gross rental yield and net rental yield. Both stay visible, because the gross figure is only the first filter.
How this calculator works
Annual cold rent is the monthly net cold rent times twelve. Service charges you only pass on to the tenant stay out. The example in how to calculate rental yield in Berlin uses a purchase price of €400,000 and a monthly cold rent of €1,333. Twelve months make €15,996. Rounded to one decimal, gross rental yield is 4.0 percent. The price-to-rent multiple, purchase price divided by annual cold rent, is 25.
Net rental yield subtracts non-recoverable costs and divides by the purchase price plus the purchase costs percentage. In that example the purchase costs are 11 percent, €44,000, and non-recoverable costs are €3,200 a year. About €12,800 of income remains on €444,000 of capital, roughly 2.9 percent net. A 4.0 percent gross figure becomes about 2.9 percent before financing and tax.
Warm rent, a hoped-for market rent instead of the rent in the contract, and a sum that ignores purchase costs all make the number look better than it is. Where that sits in a purchase is in the Berlin real estate investment guide. A tenanted flat changes the rent you can use, which is covered in buying a tenanted apartment in Berlin.
Common questions
Annual cold rent minus non-recoverable costs, divided by the purchase price plus purchase costs, times 100. In the example that is €15,996 minus €3,200, divided by €444,000, about 2.9 percent.
Purchase price divided by annual cold rent. At €400,000 and about €16,000 of annual rent, that is 25. A higher multiple is a lower gross yield.
Only as a filter. A purchase needs the net figure, the non-recoverable costs, and the financing. In the example, 4 percent in a brochure becomes about 2.9 percent net.
The net cold rent. On a tenanted apartment, that is the rent in the contract, not the warm rent and not a hoped-for market rent. One euro a month moves the annual figure by twelve euros.