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.
Net-net yield
This is the only yield that truly reflects what remains in your pocket.
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.