Gross rental yield
Annual rent divided by the purchase price, as a percentage. It ignores costs, taxes and vacancies, so the real return is lower.
Gross rental yield (hrubý výnos z pronájmu) is a simple indicator for investors: annual rent divided by the property price, expressed as a percentage. It is calculated as monthly rent × 12 ÷ purchase price × 100. It allows a quick comparison of flats in different locations and price levels.
Example
Illustrative example: a flat bought for CZK 4,000,000 and let for CZK 15,000 a month brings in CZK 180,000 of rent a year. The gross yield is 180,000 ÷ 4,000,000 × 100 = 4.5%.
What gross yield leaves out
- Building management contributions, which the owner pays even when the flat is let
- Insurance, repairs and furnishing
- Property tax and income tax on rental income
- Months when the flat stands empty, and the cost of finding tenants
- Mortgage interest and purchase costs
Net yield after these items is therefore always lower than gross yield.
Points to watch
The result is only as accurate as the inputs. Rents in listings are asking rents, and the rent actually achievable can differ with the flat's condition, furnishing and location. The Ministry of Finance rent price map gives an indicative value, which needs adjusting for a particular flat and comparing with current listings nearby. Gross yield also says nothing about how the property's price or rents will develop.
In nmvt's location check, gross yield for flats is an indicative estimate: rent from the rent price map for the location and flat size, and the asking price.
Want this information on your property's website?
We find, analyse and clearly present data about the place. On the website for clients and in the location check for the agent - depending on the nature of the information.
The explanation is general and informative, not legal advice. Binding are the land register, the zoning plan and other official sources.