Gross and net yield, monthly cash flow and payback of a rental property, with Spanish income tax.
Gross yield is the annual rent divided by the purchase price. Net yield takes off costs (property tax, service charges, insurance, upkeep, empty months) and tax, and it’s the one to compare with other investments.
The tax part follows Spanish rules: income tax (IRPF) on the rental profit, with the reductions for renting a tenant’s main home (Law 12/2023).
It depends on the area and the risk, but a net yield above 4–5% is usually considered reasonable.