Transparent calculations
Methodology, formulas and assumptions
This page explains the exact metrics and formulas used by the property calculator, together with the limits of the analysis.
Metrics and formulas
- Acquisition costs
- Purchase price × acquisition-cost percentage
- Total cost
- Purchase price + acquisition costs
- Funding need
- max(total cost − equity, 0)
- Gross rental yield
- Annual net rent ÷ purchase price × 100
- Net rental yield
- Annual operating cash flow ÷ total cost × 100
- Monthly operating cash flow
- Net rent − (operating costs − recoverable share + maintenance and management)
- Initial loan payment
- (annual linear repayment + interest on opening debt) ÷ 12
- Monthly cash flow after financing
- Monthly operating cash flow − initial loan payment
- Annual cash flow
- Monthly cash flow after financing × 12
- Equity return
- (annual repayment + annual cash flow after financing) ÷ equity × 100
- Break-even rent
- Monthly loan payment + non-recoverable operating costs + maintenance and management
Inputs and assumptions
- Purchase price, acquisition costs, living area, equity, interest and loan term are user inputs.
- Interest rate and loan term are required only when equity does not cover total acquisition cost. With full equity financing, loan payment, repayment and interest are zero.
- With full equity financing, invested equity equals total acquisition cost; without repayment, equity return therefore equals net rental yield.
- Net rent, rent and value growth, and operating costs are also user inputs.
- Financing uses linear repayment: annual principal stays constant while interest falls with the outstanding debt.
- In the 30-year projection, rent and all operating costs grow at the same user-entered rent-growth rate.
- Calculations are pre-tax and denominated in euros.
Qualitative assessment
The assessment considers monthly cash flow, net rental yield and, where equity is invested, equity return. Negative applies below −€150 cash flow or when a return is non-positive. Borderline applies with negative cash flow or a return below 2.5%. Strong requires at least €150 cash flow plus 4% net yield and meaningful equity return; other positive cases are Solid. For fully equity-financed properties, the assessment relies on net yield and equity return, not on the absence of debt.
These thresholds are guidance, not a universal market standard. No assessment is shown until the required inputs are plausible.
What is not included
The calculator does not automatically include taxes, depreciation, individual insurance, brokerage or sale costs, rent defaults and vacancy, special assessments, one-off renovations, local rent rules, subsidies, refinancing, inflation or sale transaction costs. Reserves are included only to the extent entered under maintenance and management.
Results are a simplified model and do not constitute financial, tax or legal advice. Taxes, local laws and financing terms vary by country and individual circumstances. Review important decisions with qualified professionals.