Services · Investment and yield
Net yield, not brochure yield
The return quoted in a brochure is almost always gross: annual rent divided by purchase price. The real return subtracts municipal property tax, service charges, insurance, management, maintenance, vacancy, income tax and the amortised transaction cost.
The gap between the two is not a rounding detail: it is the difference between the investment presented to you and the investment you will hold. This page sets out how we calculate it, and states just as plainly which figures we do not yet publish.
The five costs that disappear from presentations
None of them is concealed. They are simply left out, because the brochure ends on the day of purchase and the investment does not.
| Cost | What it is | Why it disappears |
|---|---|---|
| 01 Real vacancy | The weeks the property stands empty between tenancies, plus the time to make good and re-let. | The presentation assumes twelve months of occupancy. Tenancies rarely begin and end in line with the calendar year. |
| 02 Annual maintenance | Routine works, equipment, the share of common parts and a reserve for replacements, expressed as a percentage of the property's value. | It is a deferred cost. It does not appear in the first year; it appears in the fifth, and it appears at once. |
| 03 Cost of exit | Capital gains taxation, selling commission, certificates and the time taken to find a buyer. | The presentation ends at the purchase. The investment ends at the sale, and that is where the result is known. |
| 04 Tax on rental income | Taxation of the rent, under the regime applying to non-residents in the jurisdiction where the property sits. | It depends on the investor's tax residence and the applicable treaty, so it does not fit a generic presentation. |
| 05 Currency movement | The effect of rent, debt and equity being denominated in different currencies. | It is not a cost until the day it is. It materialises on conversion, and that is where it joins the result. |
How net yield is calculated
The order of operations matters more than the formula. This is the sequence we use in all three markets.
- 01The contracted annual rent, not the rent quoted in the advertisement
- 02Less estimated vacancy, in weeks, for the type of tenancy in question
- 03Less holding costs: municipal property tax, service charges, insurance, management and maintenance
- 04Less the tax on rental income applying to the investor's tax residence
- 05Divided by the total acquisition cost: price, transfer tax, deed, registration and initial works
- 06Less the cost of exit, amortised over the intended holding period
- 07Tested against an adverse case: more vacancy, lower rent, higher interest rates
The result is a range rather than a single figure, and it always arrives with its assumptions written down. A return presented without assumptions cannot be verified, and a figure that cannot be verified is not a figure.
Three markets on the same sheet
The columns are settled. The values are not published until they come from verified transactions of our own.
| Market | Observed price per unit area | Typical gross yield | Estimated net yield | Transaction cost | Liquidity (average time to sell) | Currency exposure |
|---|---|---|---|---|---|---|
| Lisbon | To be published | To be published | To be published | To be published | To be published | To be published |
| Madrid | To be published | To be published | To be published | To be published | To be published | To be published |
| Dubai | To be published | To be published | To be published | To be published | To be published | To be published |
Why this table is still empty
Publishing prices per unit area and yields gathered from portals would repeat the error this page describes. An asking price is not a transaction price, and a brochure return is not a net yield.
The table is filled in once there is a record of our own completed transactions — with dates, areas and terms — sufficient to support every cell. Until then it stays as it is: the right columns, and no invented numbers.
When it is published, the price column will use square metres and euros in Iberia and square feet and dirhams in Dubai. Units follow the market, not the language the page is read in.
What we produce instead of a brochure
The analysis is built for a specific asset and a specific investor. That is why the figure is not on this page.
- Assumptions written out one by one, with a source for each value used
- A base case and an adverse case, side by side
- Total acquisition cost, including taxes, deed, registration and initial works
- A month-by-month cash-flow schedule for the first year
- An estimated cost of exit for the stated holding period
- The point at which the transaction stops making sense, stated in writing
One asset, one scenario, the assumptions in view
Tell us what you are looking for, in which market and over what holding period. The answer is a plain reading of what the numbers allow — including when they allow not buying.