Why gross yield is not enough
A property advertised at 10% gross yield is enticing, but this figure does not account for expenses, financing costs or taxation. After deducting everything, you are often left with 2 to 5% net yield. The gap is considerable, which is why you should always calculate the net yield after tax before making a decision.
Two properties with the same gross yield can have very different net yields: the one with low expenses and an optimised tax regime will be far more profitable than the one with a high property tax and an unsuitable tax regime.
The net yield after tax formula
Net yield after tax = ((annual rent - annual expenses - tax and social levies) / total acquisition cost) x 100. The total acquisition cost includes the property price, notary fees, agency fees, renovation work and furniture.
The tax depends on the regime: under micro-foncier, you pay tax on 70% of the rent. Under the real regime, on the result after deducting expenses. Under LMNP real, depreciation often reduces the taxable income to zero. The impact is considerable.
The impact of the tax regime on yield
Take a property worth 200,000 euros all-in, rented at 900 euros per month (10,800 euros per year), with 4,000 euros in annual expenses. Gross yield: 5.4%. Net yield after expenses: 3.4%. Under micro-foncier (30% marginal tax bracket), the tax is approximately 3,600 euros, giving a net-net yield of 1.6%. Under LMNP real with depreciation, the tax can drop to zero, giving a net-net yield of 3.4%.
The difference between 1.6% and 3.4% yield is 3,600 euros per year. Over 20 years, that is 72,000 euros in tax saved. The choice of tax regime is not a minor detail.
| Criterion | Micro-foncier / Micro-BIC |
|---|---|
| Simplicity | Very simple |
| Charge deduction | Flat-rate (30-50%) |
| Optimal if charges | Low (< 30-50%) |
| Depreciation | No |
Market benchmarks
In France, a net yield after tax of 3 to 4% is considered good for standard residential property. Above 5%, it is excellent (often found in provincial areas, shared housing or short-term furnished rentals). Below 2%, you should question whether the property serves primarily as a wealth-preservation asset.
These figures vary enormously by city. Paris rarely exceeds 2-3% net. Mid-sized cities (Saint-Etienne, Mulhouse, Limoges) can exceed 6-7% net. Buy&Rent gives you access to market data to compare.
2-3%
Paris / Major cities
4-6%
Mid-sized cities
7-10%
Small cities / Rural
Calculate your net yield in a few clicks
On Buy&Rent, the net yield after tax is calculated automatically for each tax regime. You enter the price, rent, expenses and your tax situation. The simulator does the rest: it calculates the exact tax under each regime, deducts social levies, and displays the true net-net yield.
It is also the key indicator used in PDF and Excel exports for your bank files or wealth reports.