Investor guide
How to calculate rental yield before buying
Gross yield is annual rent divided by purchase price. In France, a listing that “looks cheap” often fails once notary fees, vacancy, copropriété charges and a loan are included. Use gross yield as a filter, then model net cash flow.
The formula
Gross yield (%) = (monthly rent × 12) / purchase price × 100. Example: €1,200/month on a €240,000 apartment = 6.0% gross.
Net yield subtracts notary fees (~7–8% on existing stock), works, vacancy, charges, property tax and management. A 6% gross listing often lands around 3–4% net — or negative cash flow with a mortgage.
What “good” looks like in France
Large cities (Paris, Lyon, Bordeaux) often sit at 3–5% gross: price is high, rent does not keep up. Secondary cities and some suburbs reach 6–8% gross, with more vacancy and liquidity risk.
DwellIQ estimates rent from local market data (including DVF transactions) and scores the listing against that range so you are not relying on the seller’s advertised yield.
Do this on every listing
Check price vs local €/m², estimate rent independently, then run financing (down payment, rate, term). If monthly cash flow is negative, you need a clear capital-gain thesis — not hope.
FAQ
- Is 6% gross enough?
- It is a decent filter outside Paris, but always convert to net cash flow with your loan assumptions.
- Should I use the rent in the listing?
- Treat it as a claim. Compare it to local €/m² rents; listings often show an optimistic number.
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