Calculating yield on your property portfolio

"How much yield am I making on my property?" is the question every landlord encounters in old net broker figures, and one that is rarely answered properly. Slapping a gross rental yield on a purchase of € 350,000 with € 1,400 net rent per month sounds nice (4.8% gross), but says little about what really remains.

This guide walks through the four layers of property yield: gross rental yield, net cash yield, total return including equity buildup and capital appreciation, and the IRR that ties everything together at the moment of sale. With a sample portfolio of 5 properties, every assumption broken out, and every assumption linked to a source.

Layer 1: Gross rental yield (the first sort)

Gross rental yield is the simplest metric and useful for a quick comparison between properties or regions:

Formula: annual rent (net) / purchase price × 100%

A property of € 350,000 with € 1,400 net rent per month:

• Annual rent: € 1,400 × 12 = € 16,800
• Gross yield: 16,800 / 350,000 = 4.8%

Gross figures by city in Q1 2026 (see market update):

Source: calculated based on Kadaster Q1 2026 transaction figures plus Pararius Rental Monitor Q1 2026.

Gross yield is only useful for quickly sorting properties. For a real comparison, you need to deduct costs and taxes.

Layer 2: Net cash yield (what actually lands in your account)

Net cash yield is gross rental yield minus all running costs and taxes. For most landlords this sits between 1.5% and 3%, considerably lower than the gross figure suggests.

Expenses to deduct

Maintenance (1-2% of the WOZ-waarde (official property valuation for tax purposes) per year) This is the biggest item people underestimate. Boiler servicing, leaks, painting, inspections, minor repairs at tenant turnover. For a property of € 350,000 you should budget on average € 3,500-7,000 per year.

Management (1-2% of rent) If you self-manage, you should bill an hourly rate for your own time. When outsourcing to a professional manager, the fee sits between 6-10% of gross rent. For a DIY landlord with 5 properties, 1.5% is a reasonable assumption for admin plus time.

Vacancy and turnover voids (3-5%) Between tenants there is often 2-4 weeks of vacancy. Plus the search time for difficult properties. In the Randstad in 2026 this is less than 2% due to scarcity, but in the regions it can rise to 6%. Use 4% as a safe average.

Insurance (~0.1% of the WOZ-waarde) Buildings insurance is mandatory. For a property of € 350,000 you should budget around € 350-500 per year.

Property tax (OZB, municipal, 0.1-0.2% of WOZ) Varies per municipality. Amsterdam sits around 0.12%, smaller municipalities can exceed 0.25%.

Box 3 tax (Dutch wealth tax bracket - the big drain in 2026) For let property, the Belastingdienst (Dutch tax authority) applies a deemed return on Box 3 assets for 2026. Effective rate: 36% of the deemed return. With a net Box 3 position of € 200,000 in property, you arrive at roughly € 4,300 per year in tax per property. Read Box 3 for property in 2026 for the details, including the Hoge Raad (Dutch Supreme Court) ruling and when actual return is more favourable.

Example: Property A, Rotterdam

Assumptions: purchase price € 407,000, mortgage € 200,000, equity € 207,000, net rent € 1,400/month.

Under these assumptions, Property A has negative cash flow in 2026. The gross yield of 4.1% looks attractive, but the actual annual return is negative.

That does not mean the property is a bad investment. Only at layer 3 (total return) do you see the full picture.

Layer 3: Total return (the real comparison metric)

Total return = cash yield + equity buildup (repayments) + capital appreciation.

Equity buildup and capital appreciation are what make property attractive when compared with shares or investment funds.

Equity buildup (the silent source of return)

Every month that your mortgage is paid down, you build up equity. That is not a cost, it is a shift from bank balance (cash flow) to property value (equity).

With a linear or annuity mortgage of € 200,000 with a 30-year term, you pay down roughly € 3,500 in year 1 on a linear mortgage and € 2,700 on an annuity. On your equity of € 207,000 that is 1.3-1.7% extra return per year that is not visible in your cash flow.

Capital appreciation (the variable factor)

Capital appreciation has historically averaged 3-4% per year in the Netherlands over 25 years, but in years of high inflation it can reach 8-10%, and in correction years -5% (such as during 2008-2013).

For 2026: in Q1 the increase was +5.2% YoY (Kadaster). Conservative assumption for a 5-year projection: 3% per year.

Property A example revised:

Total return year 1:

• Cash yield: -0.3% (negative, € 617 on € 207,000 equity)
• Equity buildup: 1.5% (€ 3,000 repayment on € 207,000 equity)
• Capital appreciation: +9.1% (3% of € 407,000 = € 12,210 on € 207,000 equity thanks to leverage)
• Total return: ~10.3%

Layer 4: IRR (the right metric at sale)

Internal Rate of Return (IRR) calculates the effective annual return over the entire holding period, including the moment of sale.

Formula

IRR is the rate at which the net present value of all cash flows is zero. In Excel:

=IRR(cashflow-series)

With cashflow-series = year 0: -equity / year 1-N: cash flow / year N: cash flow + sale proceeds minus remaining mortgage balance.

Example Property A over 10 years

Assumptions: purchase price € 407,000, mortgage € 200,000, equity € 207,000, annual cash flow -€ 617, repayments € 3,000/year, capital appreciation 3% per year, sale in year 10.

IRR ≈ 6.2% over 10 years. That is the real annual return on your equity, after all costs and taxes, including capital gains.

Compare that with:

• Savings account 2026: 1.5-2.5%
• VWRL ETF (global equities): historically 6-7%
• AEX Index: historically 6-8%

Property with leverage comes in at a comparable level here, provided you can get through the cash flow phase. With negative cash flow of € 617/year you have to top up for 10 years from other income.

How to tackle this yourself for your portfolio

Step 1: spreadsheet per property

Create a row per property with these columns:

• Purchase price, purchase date
• Mortgage (current balance, interest rate, term)
• WOZ-waarde, OZB
• Gross rent per month
• Maintenance costs (averaged over 3 years)
• Insurance, management
• Vacancy days last year

Step 2: calculate per layer

• Gross yield (quick sort)
• Net cash yield (real cash flow)
• Total return year-on-year (as reference for sell-or-hold decisions)

Step 3: compare within the portfolio

Which properties have the highest net yield? Which are cash flow negative? Which would you sell to reinvest capital?

Step 4: scenario analysis

What if interest rates rise by 1%? What if vacancy moves to 8%? What if capital appreciation stagnates? A good model lets you move the sliders.

The three most common mistakes

1. Forgetting to include Box 3

Box 3 is the biggest change in yield calculation since the Hoge Raad ruling of 2024. For a landlord with € 1 million of property held privately, Box 3 in 2026 quickly costs € 22,000 per year. That is 1.5-2.5 percentage points off your yield.

2. Treating maintenance as one-off

Maintenance is a structural cost item, not an incidental expense. The years in which you do not need to do anything to the property are the years in which you set aside money for the years when you replace the roof or renovate the bathroom. Always budget 1.5-2% of the WOZ-waarde, even in years when you spend nothing.

3. Setting vacancy at 0%

Even in the Randstad in 2026 with an extremely scarce market, turnover vacancy is real. Between tenants there is at least 2-4 weeks without rent (handover, inspection, minor repairs, finding a new tenant). Plus any long-term vacancy on difficult properties.

Conclusion

Property yield is not a single-number story. Gross yield is a starting point for sorting. Net cash yield shows what really comes out of the property each year. Total return including equity buildup and capital appreciation is the fair comparison metric against other investments. IRR over the full holding period is the right number for sell-or-hold decisions.

What we see at Propty: landlords with 5+ properties who systematically run their yield through all four levels make demonstrably better portfolio choices than landlords who only steer on gross figures. Not because they earn more money, but because they no longer face surprises.

Book a short demo to see how yield calculations run automatically in Propty based on your bank connection, or dive deeper into our Q1 2026 market update for regional comparisons you can apply in your own yield model.