Gross, Net, Cap Rate: Short-Term Rental Yield Done Right
Why a 9% gross yield is often a 3% net yield — and which number your banker actually wants to see.
Three numbers float around the short-term rental market, and they all mean different things. Confuse them and you buy the wrong property.
Gross yield
Gross yield = annual rental income ÷ purchase price. A nice big number — but it ignores all costs. Only useful for a first sanity check between two markets.
Net yield
Here you subtract: management, platform fees, cleaning, utilities, insurance, maintenance, property tax, vacancy. In stable markets that eats 35–45% of gross.
Cap rate
Net Operating Income (NOI) ÷ all-in purchase price. The number pros use to compare properties. It ignores financing — which makes it honest for cash-vs-loan decisions.
Worked example: €220,000 apartment in Valencia
- Gross rental income: €24,000 / year
- Gross yield: 10.9%
- OPEX + management: €8,800
- NOI: €15,200
- Closing costs 12%: €26,400
- Cap rate: 15,200 ÷ 246,400 = 6.2%
- Net yield before tax: 6.9%
We provide this calculation per property — with real booking data instead of estimates.
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