Gross yield vs. net yield in Costa Blanca — what the brochure never shows

Every brochure for a Costa Blanca rental property quotes a yield. Almost none of them quote the net yield — the number that actually arrives in your bank account at the end of the year. The gap is rarely small. On a typical €200,000 apartment in Torrevieja, the gap between the brochure number and the bank-account number is between 3 and 4 percentage points. That is the gap this piece exists to close.

The brochure number — gross yield

Gross yield is the simplest possible calculation: annual rental income divided by purchase price. A €200,000 apartment renting at €1,400 per month for 11 months produces €15,400 of annual income, a gross yield of 7.7%.

Brochures stop here. Sometimes they stop one notch earlier and quote peak monthly rent multiplied by 12, which inflates the number by another point. The 7.7% becomes a 9% headline. Both numbers are useless for decision-making because they ignore everything that happens between the tenant's payment and your bank balance.

What the gross figure leaves out

Below is the actual deduction stack on the same apartment. Numbers are illustrative, drawn from a typical Torrevieja two-bedroom in a well-run urbanisation, mid-tier furnishing, mixed short-term and long-term rental. Yours will differ — but the categories will not.

Acquisition costs spread over a 10-year hold

You pay them once at purchase but they erode the yield from year one. ITP at 10% of the price, notary and registry around 0.6%, legal and fiscal advisory 1.0–1.5%. That is roughly €24,000 on a €200k purchase, or €2,400 per year of drag if you intend to hold for 10 years.

Annual operating costs

• IBI (council tax): €380–€520 depending on cadastral revision year.
• Community fees: €1,200–€2,400 in a typical urbanisation with a pool.
• Property insurance: €280–€450.
• Maintenance reserve: rule of thumb 1% of the property value annually for repairs and replacements. €2,000 on a €200k property.
• Utilities (when units are rented short-term): €1,400–€1,800 — standing charges plus consumption that cannot be re-invoiced to short-stay guests.
• Cleaning & turnover: €25–€55 per turnover. At 30 stays a year, €900–€1,650.

Add a ten percent vacancy assumption — €1,540 in lost rent — and a rental-management fee if you are using a property manager (typically 18–25% of rent on short-term, 8–12% on long-term).

The tax layer

As covered in our Modelo 210 piece, the rate depends on whether you can deduct expenses. EU/EEA non-residents pay 19% on net rental income; everyone else pays 24% on gross. On the same flat, that produces meaningfully different bottom lines.

The full waterfall — Dutch buyer, full year

Brochure: 7.7%. Reality: 1.5%. That is not a math trick — it is the standard Costa Blanca outcome on a furnished apartment in mixed rental, with one tenant, professionally managed. The arithmetic improves with longer-term tenants (lower turnover and management cost), with self-management (savings of 18–22% of rent), and with a property purchased at a price below market.

How to read a brochure from now on

When the agent quotes 7%, ask three questions:

1. Is that gross or net? If they hesitate, gross.
2. What occupancy rate is assumed? Anything above 85% is optimistic in most coastal sub-markets.
3. Are taxes included? Not in the headline figure they aren't.

The answers will not change the property — but they will change what you offer for it.