ROI calculator: how much rental return would this property really give you?
Calculate the real ROI of buying a property to rent it out in Spain: real notary and land registry fees (not a flat estimate), your estimated rent, and three rental yield metrics side by side — gross yield, net yield and cash-on-cash return — with your mortgage, if you finance it.
What each term in your ROI results means
This ROI calculator does not just give you one number: it breaks down the full return on a buy-to-rent investment so you understand where each euro goes, from purchase costs to monthly cashflow.
- Total initial investment
- The purchase price plus all purchase costs: transfer tax (ITP), notary fees, land registry fees and administration (gestoría), plus any renovation budget. This is the full amount the operation requires, not just the price on the listing.
- ITP (transfer tax)
- A regional tax on second-hand property purchases, set by each autonomous region — it ranges roughly between 6% and 13% depending on where the property is.
- Notary and land registry fees
- Fixed by Spanish law (RD 1426/1989 for notaries, RD 1427/1989 for the land registry) on a decreasing scale by price bracket — not a flat percentage like most calculators assume.
- Mortgage payment (P+I)
- Your monthly mortgage instalment, split between principal (P, which builds your equity) and interest (I, the real cost of borrowing).
- Net monthly cashflow
- What is actually left in your pocket every month: rent received minus the mortgage payment minus operating costs (property tax, waste tax, community fees, maintenance).
- Gross yield
- Annual rent divided by the purchase price. The quickest first-filter number, but it ignores taxes, purchase costs and financing — never decide on gross yield alone.
- Net yield (on total cost)
- Annual rent minus operating costs, divided by the total investment (price plus all purchase costs). Independent of financing, so it is the fairest way to compare different properties against each other.
- Cash-on-cash return
- Net annual cashflow (after the mortgage payment) divided by the cash you actually put down. The metric that matters most when you finance with a mortgage: your real return on your own money, not on the full property price.
- Wealth built per year
- Your cashflow plus the mortgage principal you pay down each year. Principal is not an expense — it is equity you accumulate in the property, even in years when the cashflow itself is negative.
This is a generic simulation. Want the real numbers for one specific property?
The Hogarfax report goes further than this calculator: it resolves the exact rent estimate for that property, plus every risk and legal check before you buy.
Frequently asked questions about rental ROI
Why does this ROI calculator show three metrics instead of one?
Because each metric answers a different question: gross yield lets you filter properties fast, net yield lets you compare properties fairly regardless of financing, and cash-on-cash tells you the real return on the money you put down when you use a mortgage. Relying on only one can hide the real cost — or the real opportunity — of a property.
Is a good rental ROI in Spain around 4-6%?
Gross yields in Spain typically range from around 4% in expensive city centres to 7-8% or more in smaller cities and less central areas — but the number that should guide a decision is net yield or cash-on-cash, not gross yield, since taxes, purchase costs and financing change the real return substantially.
Does this calculator include income tax on rental income?
Not yet in this version — it focuses on purchase costs, financing and operating cashflow. Personal income tax (IRPF) on rental income in Spain typically applies a 50% reduction on the net return under the general regime, with higher reductions in specific cases (tensioned areas, young tenants, recently renovated homes).
