Yield is the number that decides whether a property is an investment or an expensive holiday home. It rests on two figures: the income the property produces from rent, and the growth in its capital value. This page gives you the formulas, a calculator you can run on your own numbers, the current market benchmarks for Cyprus, and an honest comparison against a buy to let at home.
On this pageThe calculator · How yield is calculated · Gross against net · What running costs include · Total return · What counts as a good yield in Cyprus · Cyprus against a UK buy to let · Yields across the Paphos district · Five common mistakes · Questions and answers
The calculator
Work out the yield on a property
NET RENTAL YIELD
This is an estimate and not investment advice. It excludes purchase taxes, transfer fees, finance costs and tax on the income, all of which vary by country and by investor.
How yield is calculated, the formulas
Gross yield measures annual rental income against the purchase price, before any costs. The formula is (monthly rent × 12 ÷ purchase price) × 100. A property bought for €300,000 and let at €1,500 a month produces €18,000 a year, which is a gross yield of 6 per cent.
Net yield uses the income that survives the running costs. The formula is (annual rent minus annual costs) ÷ purchase price × 100. On the same property, with costs at 20 per cent of income, €14,400 remains, which is a net yield of 4.8 per cent.
The payback period is simply 100 divided by the net yield. At 4.8 per cent the rent alone returns the purchase price in about 21 years. At 2.5 per cent it takes 40. That single figure tends to clarify a decision faster than any other.
Gross against net, the difference that changes the decision
Gross yield is the number in the advertisement. Net yield is the number in your bank account. The gap between them is normally 15 to 30 per cent of the income, and it is wider on older buildings, on holiday lets and on anything managed at a distance.
A property advertised at 8 per cent gross with a 30 per cent cost load is really earning 5.6 per cent. A property advertised at 6 per cent gross in a new scheme with a 15 per cent cost load is earning 5.1 per cent. The headline figures are two points apart. The real ones are half a point apart.
What the running costs actually include
Management. Roughly 8 to 12 per cent of the rent for a long let, and 20 to 30 per cent for a managed short let. An overseas owner rarely avoids this line.
Maintenance and repairs. Budget around 1 per cent of the property value a year on an older building, and considerably less on a new one under builder warranty.
Communal service charges. In a scheme with a pool, a lift and grounds, typically €600 to €1,800 a year depending on the facilities.
Insurance. Buildings and landlord cover, a small line but a real one.
Void periods. The weeks the property sits empty between tenants. One empty month a year is 8 per cent of the income gone.
Municipal charges. Cyprus abolished the annual immovable property tax in 2017. What remains is a municipal charge, usually €90 to €300 a year.
Total return, rent plus capital growth
Total return combines the net rental yield with the growth in the value of the property. A property producing a 5 per cent net yield in a market growing at 5 per cent a year is returning roughly 10 per cent a year in total.
Cyprus house prices rose about 7 per cent over the year to the fourth quarter of 2025, and the coastal districts ran ahead of that: Limassol close to 10 per cent, Larnaca about 8 per cent and Paphos about 7.6 per cent, while Nicosia was close to flat. Capital growth is real, but it is not income, it is not guaranteed, and it is only realised on a sale. Keep it in a separate column from the rent.
What counts as a good yield in Cyprus
Across the market, gross yields average close to 4.9 per cent. Limassol sits highest at roughly 5.3 per cent, Larnaca around 4.5 per cent and Paphos around 4.7 per cent. New developer schemes usually land between 5 and 9 per cent, because the rent premium on a property with a pool, parking and a lift is real and the maintenance load is lower.
Figures above 11 per cent are not market yields. They appear only in managed short letting schemes, where the operator takes a large share, occupancy is seasonal and the number quoted is usually a projection rather than a record. Treat any such figure as a question to ask, not an answer to accept. You can model it yourself in the calculator above by pushing the running cost slider to 30 per cent.
Cyprus against a UK buy to let
This is the comparison most British buyers arrive with, and it deserves an honest answer rather than a sales one. On headline gross yield, the UK wins. National average gross yields run around 7 per cent, driven by low priced northern cities, against roughly 4.9 per cent in Cyprus. Anyone telling you Cyprus produces more rent per pound invested is not comparing like with like.
The picture changes once the costs of owning are counted on both sides. A UK additional property carries a 5 per cent stamp duty surcharge on top of the standard bands, rental income is taxed at your marginal rate, and finance costs are no longer fully deductible. In Cyprus a new property bought from a developer carries no transfer fees at all, stamp duty was abolished in January 2026, there is no annual property tax, and capital growth has been running well above the UK rate. Add the permanent residency route that a new build purchase opens, and the two are no longer the same kind of investment.
The honest summary: buy in the UK for income, buy in Cyprus for total return, residency and use of the property yourself. The full cost breakdown sits in the purchase tax guide, and the new build against resale question is covered in the resale comparison.
A map of yields and prices across the Paphos district
Paphos has become one of the most sought after destinations in Cyprus for overseas investors, on the back of tourism growth, infrastructure development and new schemes. Rents in the district currently run between €13 and €25 per square metre, depending on the area, the type of property and the standard of finish.
| Area | Average rent per m² | Character |
|---|---|---|
| Kato Paphos | €18 to €20 | The most touristic area, close to the harbour and the beach, with very high demand |
| Universal | €16 to €18 | Central and well balanced between a sensible purchase price and a strong yield |
| Yeroskipou | €14 to €16 | An emerging area with new schemes and international schools |
| Chloraka | €14 to €17 | Close to the sea, with beach development and rising demand from families |
| Kissonerga | €13 to €15 | Green and rural, suited to long term investment |
| Emba | €14 to €16 | An emerging neighbourhood with room for capital growth |
| Konia and Peyia | €14 to €17 | Sea views, a quiet pace of life and demand for short holiday lets |
Established, in demand districts give a higher immediate yield with steady, moderate appreciation. Emerging areas offer lower entry prices and more room for future growth. Which suits you depends on whether you want the monthly income now or the larger number later.
Five common mistakes in a yield calculation
Quoting gross and spending net. The most expensive mistake on this list, and the most common.
Leaving out void periods. Twelve months of rent is an assumption, not a fact.
Adding capital growth into the yield. A 5 per cent yield and 7 per cent growth is not a 12 per cent yield. It is a 5 per cent yield and a hope.
Using the purchase price rather than the total cost. VAT, legal fees and furnishing all belong in the denominator. On a new build they can add 20 per cent or more.
Mixing the property return with the return on your own money. If you borrow, the yield on the asset and the yield on your equity are two different calculations. Keep them apart.
Questions and answers
How do you calculate rental yield?
Multiply the monthly rent by twelve, divide by the purchase price and multiply by one hundred. That is the gross yield. A property bought for €300,000 and let at €1,500 a month produces €18,000 a year, which is 6 per cent.
What is a good rental yield in Cyprus?
Gross yields average close to 4.9 per cent across the market, with Limassol highest at about 5.3 per cent. New developer schemes commonly run 5 to 9 per cent. A good yield is always measured against the risk and against the alternatives, not in isolation.
What is the difference between gross and net yield?
Gross yield is calculated before costs. Net yield deducts management, maintenance, insurance, service charges and void periods. The gap is normally 15 to 30 per cent of the income.
How long does it take to get the money back?
Divide one hundred by the net yield. A 5 per cent net yield returns the purchase price in about 20 years from rent alone. Capital growth is not part of that calculation.
Should the mortgage be included in the yield calculation?
Not in the yield on the property. Finance is measured separately, as return on equity, where the profit after loan repayments is divided by the cash you actually put in.
Is there an annual property tax in Cyprus?
No. The annual immovable property tax was abolished in 2017. A municipal charge remains, usually between €90 and €300 a year.
Working out what your property could produce
The calculator gives you the arithmetic. What it cannot give you is the rent a specific property in a specific street will actually achieve, or how a developer’s projection compares with what their earlier schemes deliver. That is the part we do. In a consultation we look at real achieved rents in the area you are considering, the full cost of acquisition, and what the number looks like after everything is counted.
View our properties · Book a consultation, no obligation · WhatsApp +972 54 600 4574
See also
- Property purchase tax in Cyprus, the 2026 guide
- New build or resale, the full comparison
- The investor’s guide to buying in Cyprus
- Relocation, residency and citizenship
- Why Cyprus
- Personal, end to end support for international buyers
Market figures are drawn from the Office for National Statistics, Global Property Guide and the Central Bank of Cyprus, current as at August 2026. The information here is for general orientation only and does not constitute investment, tax or legal advice.