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.

InvestmentPropertyCheck Score

The score transparently condenses the entered assumptions into 0 to 100 points. It uses no market, location or personal data and is not a market standard, investment recommendation or guarantee.

Components and weights

  • Cash flow margin 30%: cash flow ÷ monthly rent; 0 points at −20%, 40 at 0%, 70 at 10%, 100 at 20%.
  • Net rental yield 30%: 0 points at 0%, 45 at 2.5%, 70 at 4%, 100 at 6%.
  • Equity return 20%: 0 points at 0%, 40 at 2.5%, 60 at 4%, 100 at 8%.
  • Debt-service coverage 20%: operating cash flow ÷ loan payment; 0 points at 0.8, 30 at 1.0, 60 at 1.15, 100 at 1.5.

Calculation rules

  • Values between the stated thresholds are linearly interpolated; outside them, each component remains between 0% and 100%.
  • With full equity financing, cash flow and net rental yield each receive 50%. The identical equity return and absent debt service are not counted twice.
  • When equity is zero, equity return is omitted; cash flow and net yield each receive 37.5%, and stability receives 25%.
  • A Negative status caps the score at 34 and a Borderline status at 49. Categories: 80–100 Very strong, 65–79 Strong, 50–64 Solid, 35–49 Borderline, 0–34 Weak.

Gross yield, annual cash flow, break-even rent, per-square-metre metrics, acquisition costs and appreciation receive no separate points because they are already reflected elsewhere, mathematically derived or forward-looking.

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.