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Rental Yield: How to Calculate the Return

The formula every investor should master before buying a property to let in Portugal.

Equipa FOZ VILLA·Updated May 2026·6 min read
Calculating rental yield
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Before buying a property to let, every investor should be able to calculate, in five minutes, the expected gross and net yield. Here is the formula.

Gross Yield

The simplest formula: (Annual Rent ÷ Purchase Price) × 100. A property bought for €250,000 that generates €1,100/month (€13,200/year) has a gross yield of 5.3%.

Net Yield

The net yield subtracts costs: IMI, service charges, insurance, maintenance, any void periods and the management commission, should you use a professional letting service.

"A property with a 6% gross yield may, in practice, return less than 4% net — the hidden costs make all the difference."

Areas with the Best Yield in Portugal

Areas outside the major urban centres — such as parts of the Costa de Prata and the interior Centro — tend to show higher gross yields than Lisboa or Porto, precisely because the purchase price is lower relative to the rent achieved.

Appreciation vs. Income

Some investors favour capital appreciation (buying where the price will rise most) over monthly income. The right choice depends on the investment horizon and the need for liquidity.

The FOZ VILLA team assesses free of charge the yield potential of any property in our portfolio — talk to us before deciding.

Investment Renting