Investing in rental real estate is not just about buying a home and collecting rent every month. Behind every profitable project lies a precise analysis of the numbers, starting with the calculation of the rental yield. This indicator allows you to estimate the real performance of a real estate investment and to compare several opportunities in the same market. In France, the average rental yield generally ranges between 3% and 7% depending on the city according to 2024 data from MeilleursAgents and SeLoger. However, this rate can vary significantly depending on charges, taxation, or rental vacancy. Understanding how to calculate rental yield, from gross to net net, thus becomes an essential step to securing a real estate project and avoiding bad financial surprises.
Gross rental yield calculation
Gross rental yield serves as the starting point: it provides a quick snapshot of a property's profitability before taking into account charges, taxation, and financing. It is also the most commonly used indicator to compare listings with each other, provided it is calculated correctly (and not "arranged" by omitting certain costs).
The total annual rents received
The basis of the calculation is the collectible rents over an entire year. In practical terms, we start with the monthly rent "excluding charges" and multiply it by 12. If your lease includes a provision for charges (water, maintenance of common areas, etc.), it often passes through your account, but it does not enrich you: it is used to pay for expenses. For a proper calculation, we therefore first reason on the rent excluding charges.
The point that really changes the game is the consistency between the listed rent and the local market. In some cities, the "purchase price / rent level" pair mechanically produces higher yields. In 2025, SeLoger published, for example, very high indicative gross yields in certain cities like Mulhouse (around 11.3%) or Saint-Étienne (around 11%), based on observed average prices and rents. This does not mean that every property there is profitable, but it illustrates a reality: on the scale of a territory, gross yield is primarily a matter of the ratio between the price per m² and the rent per m².
The total purchase price of the property
This is where many "optimistic" calculations derail: gross yield is calculated on the total cost of acquisition, not just on the price listed by the seller. For existing properties, acquisition costs (often called "notary fees") represent an average of 7% to 8% of the purchase price. And since 2025, some departments can increase the land registration tax, which can push the bill a little higher depending on the location.
In reality, "total purchase price" means: property price + acquisition costs + any agency fees (if they are not already included) + works immediately necessary for renting. Even for a gross yield, integrating obvious renovation work from the start avoids comparing properties that are not at the same stage (an apartment ready to rent is not comparable to accommodation needing renovation).
The simple formula for gross rental yield
Once you have the two blocks (annual rents and total acquisition cost), the formula is direct:
Gross rental yield (%) = (Annual rents / Total purchase price) × 100
This ratio has two qualities: it is easy to calculate and it allows for quick sorting of opportunities. But it also has a major limitation: it says nothing about charges, taxation, or rental vacancy. In other words, it is a useful thermometer... provided it is not confused with the actual temperature "in your pocket."
A concrete example of rental yield
Let's take a simple and realistic case involving an existing property.
You buy an apartment for €200,000. You add acquisition costs of 7.5% (in the middle of the observed 7–8% range), which is €15,000. The total acquisition cost used for the gross calculation then becomes €215,000 (assuming zero immediate renovations and no additional agency fees).
You rent it for €850 per month excluding charges. The theoretical annual rents are therefore 850 × 12 = €10,200.
The gross rental yield is:
(10,200 / 215,000) × 100 = 4.74% (rounded)
This 4.7% is a good benchmark for situating the property: it is within a common order of magnitude for areas where prices remain relatively high compared to rents. And this is exactly why rankings by city can show significant differences: if prices fall faster than rents (or if rents rise faster than prices), the gross yield mechanically increases. MeilleursAgents also mentions a recent period marked by a decline in prices since 2022 and an increase in rents over the same period, which tends to improve gross yields in several markets.
The calculation of net rental yield
Gross yield gives a first impression, but it has an obvious flaw: it acts as if renting a property costs nothing. However, between property tax, co-ownership fees, insurance, management, and maintenance, a portion of the rent goes out every year. Calculating net rental yield serves precisely to put these expenses back at the center, in order to approach a profitability closer to reality.
Actual property-related charges
Even before talking about rental management, you must integrate the “structural” charges that you will pay as an owner. The most emblematic is the property tax: in 2024, its total amount reached 55.3 billion euros according to a statistical publication from the DGFiP, illustrating the massive weight of this tax in the French real estate economy. For an investor, the issue is very concrete: from one city to another, property tax can cause your annual result to vary by several hundreds, or even several thousands of euros.
Next, there is everything related to the building or the property itself, which is not necessarily billable to the tenant. “Recoverable charges” (certain routine maintenance expenses, water, etc.) are regulated and, depending on the arrangement, can be paid by the tenant via provisions or a flat rate. On the other hand, a portion of the co-ownership charges, trustee fees, or certain exceptional expenses often remain the responsibility of the lessor: it is precisely this type of item that, if underestimated, causes a supposedly comfortable yield to “fall.”
Management and maintenance costs
From the moment you delegate, rental management mechanically eats away at the net yield. In practice, management fees are frequently between 6% and 10% of annual rents, depending on the services included and the providers. This percentage seems modest on paper, but it becomes significant as soon as the gross yield is average: going from 4.7% gross to 3.x% net happens quickly, especially if the property tax is high.
Added to this may be security costs, such as unpaid rent insurance (GLI). The orders of magnitude cited by several industry players often revolve around 2.5% to 5% of the annual rent (including charges), depending on the coverage and the tenant's profile. Finally, we must not forget routine maintenance: even in a property in good condition, there is always a leak, a hot water tank, or painting to refresh. It is not spectacular, but it is regular, and it is exactly the type of expenditure that separates a theoretical calculation from a controlled profitability.
The difference between gross and net yield
Net yield consists of subtracting the annual charges actually borne by the owner, then relating this result to the total acquisition cost.
Net rental yield (%) = ((Annual rents – Unrecovered annual charges) / Total purchase price) × 100
Let's take the example of the apartment purchased for €215,000 and rented for €850 excluding charges (i.e., €10,200 per year). Let's imagine rental management at 7% of the rent (i.e., €714), GLI at 3% (i.e., €306), a property tax of €1,100, non-recoverable co-ownership charges of €600, a PNO insurance of €120, and €300 for routine maintenance over the year. Annual charges then total €3,140, which brings the annual income before taxes to €7,060.
The net yield becomes:
(7,060 / 215,000) × 100 = 3.28% (rounded)
We can clearly see the idea: the gross yield gave an impression of comfort (4.74%), but once "normal" charges are factored in, the yield drops to around 3.3%. This isn't necessarily bad (many investments are in that range), but it is closer to the reality for a landlord, and therefore much more useful for making a decision.
Calculating the net-net rental yield
Net yield already gets you closer to reality, but one masterpiece is still missing: tax. However, on a rental investment, taxation can vary the final result dramatically, especially if you are in a high marginal tax bracket. Calculating the net-net rental yield therefore consists of starting from the net income (after charges) and subtracting income tax and social security contributions to obtain the yield actually retained.
Taxes applied to rental income
For a bare rental (unfurnished), rents fall under property income and are added to your other taxable income. They are subject to income tax according to the progressive scale, whose brackets for 2026 taxation (on 2025 income) are published by the administration.
To this are added social security contributions. For a landlord fiscally domiciled in France, the administration points out that the global rate applied to rental income is 17.2% (CSG 9.2%, CRDS 0.5%, solidarity levy 7.5%) and that it applies to net income (after the allowance in micro-regime, or after deduction of expenses in the actual regime).
Important point: you may have seen an increase to 18.6% linked to the CSG in 2026 on certain capital income. It does exist for categories of investment income, but it is not presented as the reference rate for rental income in the tax administration's landlord documentation; for the calculation of the net-net rental yield in bare rental, the official benchmark therefore remains 17.2%.
The role of the real estate tax regime
Taxation does not only depend on your income: it also depends on the regime you choose (or which applies automatically).
In bare rental, if your annual gross rents do not exceed €15,000, you are in principle subject to the micro-foncier regime, with a flat-rate allowance of 30% (you are therefore taxed on 70% of the rents, without being able to deduct other charges). Conversely, under the actual regime, you deduct the expenses actually paid (property tax, loan interest, deductible works, management fees, etc.), which can significantly reduce the taxable base, or even create a property deficit in some cases.
In furnished rental, the tax category changes (BIC) and therefore so does the logic. And since the 2025 income declared in 2026, the administration has modified the "micro" rules for certain furnished tourist accommodations (notably unclassified ones, with a lowered threshold and a reduced allowance). Even if your subject is focused on rental yield in the broad sense, it is a useful reminder: the strategy (bare/furnished/seasonal) impacts not only the rent, it also impacts taxation, and therefore the net-net yield.
The rental yield actually retained
A simple way to reason is to start from your annual net income (rents – non-recoverable charges) and estimate what goes in taxes.
Net-net rental yield (%) = ((Annual net income – Taxes and social security contributions) / Total purchase price) × 100
Take the previous example: total acquisition cost €215,000, annual rents €10,200, annual charges €3,140. Your net income before tax is therefore €7,060, and your net yield was approximately 3.28%.
Suppose now that, given your situation, this property income is taxed at a marginal bracket of 30% (progressive scale) and that social security contributions are applied at 17.2% on this taxable net income (simplified "actual regime" hypothesis, without deductibility subtleties).
Approximate tax burden: 7,060 × (30% + 17.2%) = 7,060 × 47.2% = €3,332 (rounded).
Retained income: 7,060 – 3,332 = €3,728.
The net-net rental yield then becomes:
(3,728 / 215,000) × 100 = 1.73% (rounded).
This figure often surprises investors the first time they see it: a property that is "decent" in gross terms can become frankly average in net-net terms if taxes are heavy. Conversely, this is also why the actual tax regime (régime réel), the optimization of deductible expenses, and the management of status (unfurnished vs. furnished) can change a project's trajectory, without even touching the rent.
Factors that affect rental yield
Even if your rental yield calculation is accurate (gross, net, net-net), one reality remains: this yield is not fixed. It fluctuates with very concrete factors, some predictable, others unforeseen. This is often where the gap lies between a "correct on Excel" investment and a truly high-performing investment over 10 or 15 years.
Rental vacancy of the property
A rental yield implicitly assumes that the property is rented 12 months out of 12. In practice, a re-letting process, an unexpected departure, an insurance claim, or a longer delay in securing a tenant profile can create a cash flow gap. And this gap shows up immediately in the yield: just one month of vacancy already represents –8.3% of annual rent (1/12), while your owner charges (property tax, insurance, interest, etc.) do not stop.
What is often forgotten is that vacancy is not limited to "your empty apartment." It also exists on a market-wide scale: as of January 1, 2025, INSEE estimates 3.0 million vacant homes, or 7.7% of the housing stock, a decrease compared to 2019. This macro data does not predict your personal vacancy, but it serves as a simple reminder: depending on the sector, the supply/demand balance is not the same, and your ability to re-let quickly will depend as much on the location as on the rent level and the quality of the property.
Concretely, if your net yield is 3.3% with 0 vacancy, only 2 unrented months are enough to drop the result by approximately 16.7% at constant income. This is why a good reflex consists of integrating, from the start, a prudent assumption (for example, 1 month of vacancy every 2 years), rather than reasoning as if everything always goes perfectly.
Necessary work and renovations
Renovations have a double impact: they cost money, and they can also "buy" a better rent or better liquidity upon resale. The trap is to integrate work only as an expense, or only as a valuation lever, without measuring the break-even point.
Regarding energy renovation, the orders of magnitude can be high: the French Banking Federation, via its 2025 barometer, mentions an average amount for energy renovation work of €20,928, up compared to 2023. Other consumer estimates speak of an "overall" energy renovation often situated between €400 and €700/m² depending on the scope of the work and the performance objective. In a rental investment, this can represent several years of cash flow if you do not anticipate it.
What changes the game is the schedule: a heavy batch of work can also create vacancy (uninhabitable housing), thus a temporary double penalty. Conversely, targeted work (heating, insulation, ventilation, joinery) can stabilize the rental, reduce certain risks (humidity, discomfort), and support the value of the property, in a context where the DPE (Energy Performance Certificate) increasingly weighs on prices and demand.
Financing costs of the credit
Many investors look at the net-net rental yield… but forget that credit has its own logic: it is not a "charge" like property tax; it is a financial contract that determines your savings effort, your risk, and your flexibility. In practice, the cost of financing can transform a profitable investment into a cash flow strain, especially in the early years.
In March 2026, broker barometers showed averages around 3.41% over 25 years (conditions obtained by clients) according to CAFPI, with similar levels also reported by other barometers. At these rates, the interest portion at the beginning of the loan is significant, which increases the total cost "monthly payment" (monthly payment + borrower insurance), even if part of it is repaid capital.
Two direct consequences on your rental yield calculation. First, if you compare two properties with the same net-net yield, the one that requires a higher monthly payment (rate/term/insurance) may be riskier in case of the unexpected (vacancy, work, rent reduction). Second, "your own" profitability also depends on your strategy: amortizing quickly (shorter term) can reduce the total cost but increase the monthly effort; spreading it out (longer term) can secure cash flow but make the credit more expensive. There is no universally right choice, only a choice consistent with your safety margin.
Rental market variations
The rental market is not stable: rents evolve, sometimes slowly, sometimes faster, and often under constraints (local rent control, market tension, ceilings, household purchasing power). The simplest national benchmark is the IRL (Rent Reference Index): in the 4th quarter of 2025, INSEE published an increase of +0.79% over one year, which mechanically sets the maximum increase in reviewable leases according to the rules.
In real life, this means that your rent can increase… but not necessarily at the same rate as your expenses. A rising property tax, an insurance contract that becomes more expensive, or a co-ownership that votes for significant expenditures can increase faster than the IRL (Rent Reference Index), and cut into the yield. Conversely, in certain sectors, rental tension and the evolution of rents can improve the trajectory, especially if your property is well-positioned (EPC, services, location, in-demand typology). The yield is therefore not just a figure at the time of purchase: it is also an ability to remain competitive and lettable over time.
What to remember
Calculating rental yield is not a single formula, but rather a multi-level reading: gross for a quick comparison, net to align with actual expenses, and net-net to see what you really keep after taxes. Once these foundations are set, the profitability of a real estate investment depends primarily on what affects the yield over time: rental vacancies, renovations (especially energy-related), the cost of credit, and rental market dynamics. By treating these variables as parameters to be managed rather than "surprises," you transform a theoretical yield into a robust profitability, capable of holding up when reality hits the accounts.
