Rental yield calculation 2026: gross vs. net (formula + worked example)
RentTab · Published: 25 June 2026
Rental yield shows what percentage of the purchase price the letting returns in a year. Gross yield = annual rent ÷ purchase price; net yield subtracts the yearly costs and tax. In 2026 a typical city flat shows 4–6% gross, with net running 1–2 percentage points lower. (The tax context below is Hungarian; adapt to your market.)
This article walks through the full calculation: both formulas, the payback period, and one fully worked example — so you don’t fool yourself with the gross number when net is what actually matters.
What is rental yield? (the meaning)
Yield relates the annual letting income to what the property cost. It has two levels:
- Gross yield: income only, ignoring costs. Fast, but too optimistic.
- Net yield: subtracts the real yearly costs (vacancy, maintenance, insurance) and tax. This is the real number to decide on.
The gap between them can easily be 1.5–2 percentage points — which is why it’s worth going all the way to net.
Gross yield formula
The simplest metric, for quick comparison:
Gross yield (%) = (monthly rent × 12) ÷ purchase price × 100
For example a HUF 50,000,000 flat at HUF 220,000/month:
- annual rent = 220,000 × 12 = 2,640,000
- gross yield = 2,640,000 ÷ 50,000,000 × 100 = 5.28%
But this number pays no costs and no tax yet — that’s where the trap is.
Net yield formula (the real number)
Net yield subtracts the yearly costs and tax:
Net yield (%) = (annual rent − annual costs − tax) ÷ purchase price × 100
Staying with the example, typical yearly items:
| Item | Amount (example) |
|---|---|
| Vacancy (1 month lost) | −220,000 |
| Maintenance / reserve (~5%) | −132,000 |
| Home insurance | −30,000 |
| Income tax (see below) | −356,400 |
| Total deductions | −738,400 |
- net annual income = 2,640,000 − 738,400 = 1,901,600
- net yield = 1,901,600 ÷ 50,000,000 × 100 = 3.80%
So the “5.28%” flat actually returns 3.80% — and that difference decides whether it’s worth it.
On tax: in 2026 a Hungarian private landlord typically pays 15% personal income tax and may choose the 10% cost ratio (tax base = 90% of income). In the example: 2,640,000 × 90% × 15% = 356,400. Always check the current rule with the tax authority, as itemised deduction may be more favourable.
Payback period
Payback tells you how many years it takes the income to “earn back” the price:
Payback (years) = purchase price ÷ annual income
- on gross: 50,000,000 ÷ 2,640,000 ≈ 18.9 years
- on net: 50,000,000 ÷ 1,901,600 ≈ 26.3 years
Net payback is the realistic one — plan with that, not the shorter gross figure.
What’s a good rental yield in 2026?
Reference points for long-term letting:
- gross 4–6% is typical in the capital,
- net 3–4.5% is a realistic expectation with a good tenant and low vacancy,
- a cheaper provincial flat can show higher gross, but vacancy and maintenance erode it fast.
Higher rent, low vacancy and accurate utility settlement raise the yield; long vacancy and unpaid debt lower it.
Letting as an investment — what to weigh
Beyond net yield, letting is work and risk: finding tenants, maintenance, admin, the risk of non-payment. Put those next to the “yield” of a deposit or government bond — in return, letting can also bring capital appreciation, which the yield calculation doesn’t show.
Where RentTab helps
Net yield needs the real yearly costs and income — not estimates. RentTab records the rent, the utilities and the fees per property, so at year-end you have a solid basis to compute the actual net yield. RentTab doesn’t handle money and doesn’t give investment advice — it supports the records and the settlement; the decision is yours.
Frequently asked questions
What’s the difference between gross and net yield? Gross counts rent only (annual rent ÷ purchase price). Net subtracts the yearly costs (vacancy, maintenance, insurance) and tax — that’s the real yield.
How do I calculate rental yield? Gross yield = (monthly rent × 12) ÷ purchase price × 100. Net yield = (annual rent − annual costs − tax) ÷ purchase price × 100.
What’s a good yield on a rental flat in 2026? In the capital typically 4–6% gross, 3–4.5% net. Provincial flats can show higher gross, but vacancy erodes it.
Does capital appreciation count toward yield? Not in the classic calculation — that looks at rental income only. Appreciation is a separate gain realised on sale.
What hurts yield the most? Long vacancy and a non-paying tenant. A single lost month cuts annual rental income by ~8%.