Property Investment
How to Calculate Rental Yield in Limassol
The arithmetic, step by step: gross yield, net yield, and the recurring costs that separate the two on a Limassol apartment.
Yield is simple arithmetic that is easy to overstate. This guide shows the calculation, then the deductions that most published figures quietly omit.
Key takeaways
- Gross yield = annual rent ÷ total purchase cost, including transaction costs.
- Net yield subtracts management, communal expenses, insurance, maintenance, voids and tax.
- Use dated local rental evidence, not a projection supplied by a seller.
- Run the calculation again at a lower rent and a longer void to test the downside.
Step one: total cost, not price
Add every one-off cost to the purchase price — VAT treatment, stamp duty, legal fees, Land Registry costs, furnishing where relevant. That total is your denominator.
Step two: achievable annual rent
Use current, dated comparable evidence for the same area, size and specification. Where a seller quotes a rent, ask what it is based on and whether it reflects signed tenancies.
Step three: deduct the holding costs
Subtract each recurring cost to reach a net figure.
- Management fee
- Communal expenses
- Insurance
- Maintenance and periodic refurbishment
- Void allowance
- Tax on rental income
Step four: stress-test it
Re-run with a lower rent and a longer void. An investment that only works at full occupancy and peak rent is not an investment, it is a forecast.
Frequently asked questions
- Should I use purchase price or total cost in the yield calculation?
- Total cost. Using the headline price flatters the yield by excluding the transaction costs you actually paid.
About the author
Arvora Investor Desk
Investment and client advisory
The Arvora Investor Desk works with private buyers, family offices and investors purchasing residential property in Limassol.
Part of our pillar guide: Limassol Property Investment Guide.