Calculate Property Rental Yield

Best way to Calculate Property Rental Yield

Is the selected property really suitable for you? The answer to this question depends not only on the location of the property, but also on the return. Especially in recent years, the real estate industry has experienced a big boom. But why is this so? One reason for this is the fear of investing in other plants. People want a stable investment with a high rental yield. A condominium or similar buildings are ideal.
Investors naturally aim for a high rental yield with their own property. Private buyers usually buy real estate for retirement. But even there, self-use and rental with high returns is possible.

Return on rents

Those who decide to invest in real estate should have a look at the rental yield. A suitable property is important to make a profit in addition to the bond for the property. In this case, the investments should eventually bring a high return. That’s where real estate differs from equities and other bonds. On average, the rental yield in Germany is around four percent. Real estate is always needed and is therefore always seen as a lucrative investment. Despite all this, the rental yield depends on various factors. This includes, among other things, the location of the property, the purchase price and the continuous rental income that the investor receives.

What is there to consider?

In order to achieve a high rental yield, an accurate rental price calculation is necessary. Landlords are entitled to increase the rent in certain respects. This is the case if the capping limit is respected. In this case, the tenant may increase the rent to a maximum of 20 percent within three years. On the other hand, the landlord should consider whether he really wants to achieve the maximum rent. Reliable tenants are more important than unreliable ones who pay the maximum rent. In order for the rent to arrive regularly and on time, you can find trusted and reliable tenants. The following points should be taken into account when looking for tenants:

  • Checking the creditworthiness of all prospective tenants
  • Obtaining a rental deposit of at least two months
  • Rental payments by standing order
  • Direct debits for rental payments

Based on these factors, the landlord can already obtain some collateral. Poorly paying tenants can eventually worsen the rental yield.

Long-time experienced real estate agents wanted for existing customer support!

How do I calculate the rental yield correctly?

If you want to buy property, you should also calculate the rental yield. If one wants to calculate the rental yield for a condominium, one speaks of the ratio of the purchase price to the net annual rent. The purchase price of a property refers to all costs. Ancillary costs, such as notary costs, real estate transfer tax and others are also included. In order to be able to calculate the net annual rent, the running costs are important. The running costs of a property include depreciation, reserves and the maintenance of a property. The assumed return should not be the sole focus when buying the desired property. Accurate analysis of the environment, location and general condition is important to achieve a high long-term rental yield. The more maintenance costs you incur, the lower the rental yield.

What should be the rental yield?

A rental yield of four percent was normal for a long time. However, this is the gross return that can be achieved. To calculate the optimal rental yield, multiply the cold rent by a factor of 100 and divide this result by the purchase price of the property. This amount is the gross return. Of course, renting is much more worthwhile if mortgage rates and financing are kept low. These are deducted in the gross return. In principle, a net rental yield of between four and five percent is acceptable. If the rental yield is less than four percent, investing in another investment makes more sense. It’s hard to say how much rent an property will pay. There are many properties that need to be included. The nature of a property, the location and the size of the apartments to be rented play an important role. The better the rental developments in a property, the higher the rental yield.

Benefits for Investors & Owners of Registration with E1 Holding

Competent advice on your investment.

Many years of experience with large investments & large-scale projects.

Our references speak for themselves.

We bring together investors and owners for large-scale projects.

Do you have any questions or would like to test the real estate franchise?

We look forward to hearing from you!

Investing in a secure future

The E1 Investments concept offers a proven system for the solid development of a business as a broker and owner of a real estate business. E1 Real Estate has the infrastructure and operating systems that enable us to offer first-class services with a team of brokers. You are investing in the market of the future.

Earn the big money with the right real estate!

With just one shop, you’re in the fast lane! Get in touch now!

Real estate prices analysis for 80 locations throughout Germany

Location analysis

E1 Holding offers location analysis for real estate for almost 100 cities nationwide in all federal states. Our well-trained experts for real estate and investments as well as off-market real estate in various locations and sizes take a professional and authentic look at the real estate market at the respective location. In doing so, we determine realistic and continuously updated real estate prices depending on the market situation as well as a corresponding real estate forecast. We are constantly expanding the list of alphabetically ordered locations and intensively expanding the data base for more and more cities. In addition to investors and investors with budgets of all sizes, our nationwide location analyses are also valuable for housebuilders when deciding on a location. Click here


Stay up to date

Our press releases

Agency law from December 2020

Agency law from December 2020 What do real estate agents have to pay attention to from 23.12.2020? For information for our brokers and E1 licensees: Shortly before Christmas, there was a change in the brokercommission commission: the new law on brokerage commission from 23 December 2020 was already adopted by the German Bundestag in June

Read more »
Sell Residential Properties

Real estate market Boomt

E1 Holding expands with 3 further Locations 2 x Berlin and 1x Cologne E1 Holding expands with three other locations Despite Corona, the real estate market is booming, and E1 Holding continues to grow successfully. In Germany, three new locations are now added to the existing 43 locations. Two of them are located in Berlin,

Read more »
Topic End-of-year business in real estate

Topic End-of-year business in real estate

Topic End-of-year business in real estate End-of-year business real estate End-of-year business real estate – High Noon for real estate agents, investors and property owners It is well known that, in terms of average annual turnover, most transactions take place on the real estate market around the turn of the year. This applies to both

Read more »
Пузырь недвижимости Германия

Real estate bubble Germany

Real estate bubble Germany Threatens a Massive Crash? Property prices in Germany have increased significantly in recent years. After the global housing crisis just over a decade ago, fears are once again being raised that there could be a housing bubble in Germany. Experts warn that in many regions of our country, house and condominium

Read more »
Когда ловушки цены на недвижимость

When traps real estate prices

When do real estate prices fall? The real estate market follows different rules The real estate market follows different rules from the markets of other products. Who simply refers to the law of supply and demand in response to the question “When do real estate prices fall?” definitely falls short. For example, the real estate

Read more »

Find real estate agents

Find real estate agents A small detached house Buy or sell a small detached house or condominium – the easiest and safest way to do this is through the mediation of a local real estate agent. You can find the best real estate agent if you make a thorough comparison in advance. Check (,) the

Read more »
Успешно даже во времена кризиса с недвижимостью

Successful even in times of crisis with real estate

Successful even in times of crisis with real estate The Corona crisis has The Corona crisis has long since reached the real estate market. This raises the interesting question of whether a real estate agent or a real estate investor is actually one of the winners or the losers of this crisis. Surely one or

Read more »
Инвесторы ищут недвижимость, как никогда раньше!

Investors are looking for real estate like never before!

Investors are looking for real estate like never before! It’s not a new insight from the Corona Crisis that investors flee in times of crisis in tangible assets such as real estate. This is no different during the Corona crisis. However, as a real estate owner, real estate investor, or real estate agent, you should

Read more »

Will the German Property Market Sink or Swim during the COVID-19 Pandemic?

Will the German Property Market Sink or Swim during the COVID-19 Pandemic? The COVID-19 crisis has come as a shock to global economies. In Germany, the pandemic has had a devastating impact on the economy, and no sector is left untouched. Even real estate, which is usually safe from market fluctuations, is experiencing instability due

Read more »
Scroll to Top