What is a good rental yield in Europe in 2026?

Anything above 6% gross is strong in Western Europe. Eastern and Balkan capitals routinely deliver 6% to 9% gross, with Belgrade, Bucharest and Sofia at the top of the list. Net yields after tax and costs typically run two to three percentage points lower than gross.

Gross or net yield, which should I use?

Always compare net. Gross is simply rent divided by price, ignoring costs. Net subtracts management, maintenance, insurance, vacancy, property tax and income tax. The gap can be two to four percentage points and is the difference between a viable investment and a loss.

Are short-term rentals still profitable in 2026?

Yes in many markets, but the regulatory map has tightened. Barcelona stopped issuing new STR licences in 2024, Lisbon's centre has caps, Athens central districts have rolled out restrictions, and Florence and Dubrovnik old town have moratoriums on new permits. Suburbs and second-tier cities remain open.

Where are yields highest right now?

Belgrade, Bucharest, Sofia, Plovdiv, and several Greek mid-sized cities are consistently delivering 6% to 9% gross. Capital appreciation potential varies, Belgrade and Sofia have stronger price growth, smaller cities may stagnate.

Should I buy for yield or capital growth?

Higher-yield markets typically have lower price growth. Berlin and Lisbon are appreciation plays, Belgrade and Bucharest are yield plays. A balanced portfolio holds both, but most foreign buyers concentrate in one.

Do I have to declare rental income in two countries?

Yes, generally. You declare in the country where the property sits, and in your tax-residence country. Double-tax treaties prevent paying full tax twice but the paperwork is real.

How does the EU tax cedolare secca regime work in Italy?

Italy offers landlords a flat 21% (or 10% in negotiated-rent contracts) on residential rental income, with no expense deductions but no IRPEF either. It often beats the standard income-tax route for foreign buyers with no other Italian income.

What occupancy rate should I assume for short-term rental?

Plan for 60% to 70% in established city markets, 40% to 55% in seasonal coastal markets averaged across the year. Avoid relying on the peak-summer figures developers and agents quote.

Rental yields in Europe 2026, city-by-city guide

Where rental yields are highest in Europe in 2026, gross vs net, top yield cities, tax leak. List for free on immio when you sell.

Rental yield is the most-quoted and most-misunderstood number in European property investment. A 9% headline yield in a Bulgarian secondary city can become 4% net after tax, vacancy and management. A 4% gross in central Madrid can outperform it once capital appreciation is added in. This guide lays out the realistic yield map across Europe in 2026, the tax leak that erodes gross to net, and where the regulatory environment is closing or opening doors for short-term lets.

What rental yield actually means

Rental yield is annual rent as a percentage of property value. It comes in two flavours.

Gross yield is the simple version: annual rent divided by the all-in purchase price. If a EUR 150,000 flat rents for EUR 900 a month, gross is EUR 10,800 / 150,000 = 7.2%.

Net yield subtracts the running costs you actually pay: property tax, building insurance, community charges, repairs, vacancy, management fee, and income tax on the rent. On the same flat, the net might land at 4.5% to 5.5%. The gap between gross and net is the most useful number in the analysis. A 9% gross with 4% leakage is the same as a 5% gross with no leakage, except the high-leakage version usually carries higher operational risk.

Why does yield matter? Because it tells you what the property pays you while you wait for capital appreciation. In markets where prices may stagnate for a decade, and several European markets did exactly this through the 2010s, yield is your only return. In markets where appreciation is structural, yield underwrites the holding cost so you do not have to subsidise the asset out of salary.

Top yield cities in 2026

The figures below are 2026 indicative averages from listing data and market reports. They are city averages, individual deals can sit one or two points either side. All sale prices and rents refer to typical city-centre two-bedroom apartments.

City	Country	Sale EUR/sqm	Rent EUR/sqm/mo	Gross yield
Belgrade	Serbia	2,400	14	7.0%
Bucharest	Romania	1,900	11	6.9%
Sofia	Bulgaria	1,800	10	6.7%
Plovdiv	Bulgaria	1,400	8	6.9%
Cluj-Napoca	Romania	2,400	12	6.0%
Athens	Greece	2,800	14	6.0%
Thessaloniki	Greece	2,200	11	6.0%
Warsaw	Poland	4,500	22	5.9%
Tallinn	Estonia	3,800	17	5.4%
Naples	Italy	2,500	11	5.3%
Madrid	Spain	5,200	21	4.8%
Lisbon	Portugal	5,500	21	4.6%
Split	Croatia	4,200	16	4.6%
Berlin	Germany	5,800	17	3.5%

Two patterns stand out. First, the Balkan capitals, Belgrade, Bucharest, Sofia, consistently sit at the top, partly because property prices have not fully caught up with the strong rental demand from young professionals, students and remote workers. Second, the Western European glamour markets sit lower because purchase prices have run faster than rents over the last decade, leaving yields compressed.

A note on coastal markets: averaged across the year, Croatian Adriatic yields look like 4% to 5% on the table, but they cluster heavily in summer, three months of high-season rental income carry the rest of the year. The same applies to Greek island and Italian coastal markets. If you are weighing coast versus city, the beach property guide goes deeper.

Yield strategies in 2026

The strategy you pick determines what is realistic. Five archetypes work in 2026.

Long-term residential is the conservative play. 12-month leases to working-age tenants, professional management, light tax burden where the property is held in your personal name. Realistic yields: gross figures from the table, less roughly 1.0 to 1.5 points for management, vacancy and maintenance, less income tax.

Mid-term (one to six months) is the under-discussed sweet spot in 2026. Furnished lets to corporate relocations, digital nomads, students on short courses, and patients of medical-tourism clinics. Premium of 30% to 60% over long-term rent, lower regulatory risk than full short-term, but seasonal vacancy. Strong in Lisbon, Athens, Belgrade, Sofia and Tbilisi.

Short-term / holiday is the highest-headline-yield strategy and the one with the most regulatory risk. In permitted zones, it can deliver double the gross of long-term lets, but management is intensive and 2024-2026 brought sharp restrictions in many city centres.

Student housing works in dedicated university cities, Cluj, Sofia, Plovdiv, Coimbra, Pavia, Debrecen. Gross yields of 7% to 9% are realistic on apartments configured for room-by-room rental, but you take on heavier management.

Co-living is small but growing in Spain, Portugal and Germany. Premium prices per square metre, strong demand among 25 to 35 year-olds, requires either bespoke development or a building large enough to professionalise.

How tax erodes gross to net

Three worked examples make the gap visible. All assume an EU buyer purchasing a EUR 150,000 flat for cash.

Sofia, Bulgaria. Long-term rental EUR 900/month = EUR 10,800/year gross. Subtract property tax (EUR 200), management at 8% (EUR 864), insurance + repairs (EUR 600), 5% vacancy (EUR 540). Net before income tax: EUR 8,596. Bulgarian rental income is taxed at 10% with a 10% standard expense deduction, so taxable EUR 7,737, tax EUR 774. Net after tax: EUR 7,822, or 5.2% on EUR 150,000.

Athens, Greece. Same flat, same rent, but Greek rules differ. Gross EUR 10,800, costs EUR 2,300, net before tax EUR 8,500. Greek rental tax sits at 15% on the first EUR 12,000, so tax of EUR 1,275. ENFIA property tax adds EUR 400. Net after tax: EUR 6,825, or 4.6%.

Madrid, Spain. Gross EUR 10,800, costs EUR 2,400 (higher community fees), net before tax EUR 8,400. EU residents pay 19% on net rental income with full expense deductions, so tax around EUR 1,600. IBI EUR 350. Net after tax: EUR 6,450, or 4.3%.

The pattern: the 6.7% Bulgarian gross becomes 5.2% net, the 6.0% Greek gross becomes 4.6% net, the 4.8% Spanish gross becomes 4.3% net. The compression is roughly 1.5 to 2.0 percentage points everywhere. Don't trust gross headlines, model each deal on net.

Where short-term rentals are restricted in 2026

The regulatory tide has been against urban short-term lets across most of Europe. The 2026 map looks like this.

Barcelona stopped issuing new STR licences in 2014 and has signalled it will not renew existing ones when they expire (the city aims for zero by 2028). Buying for STR is effectively closed.

Lisbon placed a moratorium on new Alojamento Local registrations in central districts in 2023, partially extended in 2025. Suburbs (Almada, Cascais inland, Sintra inland) remain open.

Athens centre. Restrictions on new STR registrations took effect in 2025 for the central districts (Acropolis, Plaka, Koukaki). Greek STR remains open in coastal areas and the islands but with tighter tax compliance.

Dubrovnik old town caps STR licences at the 2023 level. Outside the walls and elsewhere on the Adriatic, STR remains available.

Florence centre banned new STR registrations in the historic centre in 2023.

Amsterdam, Paris, Berlin all have heavy primary-residence rules: STR is allowed only on your own home, capped at 60 to 120 nights per year. Pure investment STR is impossible inside the ring road.

What this means for 2026 buyers: assume central districts of major Western European cities are closed for new STR investment, and price the property accordingly. STR remains viable in coastal markets, second cities, and Eastern European capitals where regulation has not yet caught up.

High yield, high risk

Some yield numbers look spectacular and are. Others mask depopulation, structural vacancy or regulatory risk.

Small Bulgarian secondary cities, Pleven, Vidin, Vratsa, show 8% to 10% headline yields, but population has fallen 20% to 30% over a decade and tenant demand is thin. Romanian regional towns outside the Cluj-Bucharest-Timisoara axis show similar dynamics. The yield is real today but the resale exit is hard.

Greek islands outside the Cyclades and Dodecanese show similar issues, winter populations of 1,500 cannot support a year-round rental market. Beach property guides cover this in detail; see the dedicated beach property guide.

Italian Calabrian and Sicilian inland villages with EUR 1 homes have no rental yield at all, despite the headlines. There is no tenant to rent to.

The rule of thumb: a city with stable or growing population, a working-age inflow, and a functioning rental market sustains yield. A city with depopulation and weak local economy may show yield numerically but cannot deliver it operationally.

Capital appreciation versus yield

The yield-versus-growth trade-off is the central question for any European real estate portfolio in 2026. Western markets, Madrid, Lisbon, Berlin, Milan, have delivered 4% to 7% annual price growth over the past five years but yields are compressed. Eastern markets, Belgrade, Sofia, Bucharest, Tirana, deliver yield first and growth second, with growth ranging from steady to volatile.

Most foreign buyers either focus on yield (live off the income) or on growth (build wealth for sale in 10 to 15 years). A handful build a balanced portfolio across both. The choice depends on time horizon, tax residency and what you want the property to do for you.

If you are still researching, browsing Athens listings or Sofia listings gives a feel for current price points before you commit to a strategy.

Practical takeaways

Yield is the most useful early-stage metric and the most misleading late-stage metric. Use gross yield to filter cities. Use net yield, with realistic vacancy and tax assumptions, to choose the deal. Avoid the trap of headline yields in shrinking towns. Match strategy to regulation, STR in places where it is legally durable, mid-term in regulated cities, long-term where management is hard.

Selling a property in Europe? You can list it on immio for free, one active listing at EUR 0, no credit card.

Frequently asked questions

What is a good rental yield in Europe in 2026?: Anything above 6% gross is strong in Western Europe. Eastern and Balkan capitals routinely deliver 6% to 9% gross, with Belgrade, Bucharest and Sofia at the top of the list. Net yields after tax and costs typically run two to three percentage points lower than gross.
Gross or net yield, which should I use?: Always compare net. Gross is simply rent divided by price, ignoring costs. Net subtracts management, maintenance, insurance, vacancy, property tax and income tax. The gap can be two to four percentage points and is the difference between a viable investment and a loss.
Are short-term rentals still profitable in 2026?: Yes in many markets, but the regulatory map has tightened. Barcelona stopped issuing new STR licences in 2024, Lisbon's centre has caps, Athens central districts have rolled out restrictions, and Florence and Dubrovnik old town have moratoriums on new permits. Suburbs and second-tier cities remain open.
Where are yields highest right now?: Belgrade, Bucharest, Sofia, Plovdiv, and several Greek mid-sized cities are consistently delivering 6% to 9% gross. Capital appreciation potential varies, Belgrade and Sofia have stronger price growth, smaller cities may stagnate.
Should I buy for yield or capital growth?: Higher-yield markets typically have lower price growth. Berlin and Lisbon are appreciation plays, Belgrade and Bucharest are yield plays. A balanced portfolio holds both, but most foreign buyers concentrate in one.
Do I have to declare rental income in two countries?: Yes, generally. You declare in the country where the property sits, and in your tax-residence country. Double-tax treaties prevent paying full tax twice but the paperwork is real.
How does the EU tax cedolare secca regime work in Italy?: Italy offers landlords a flat 21% (or 10% in negotiated-rent contracts) on residential rental income, with no expense deductions but no IRPEF either. It often beats the standard income-tax route for foreign buyers with no other Italian income.
What occupancy rate should I assume for short-term rental?: Plan for 60% to 70% in established city markets, 40% to 55% in seasonal coastal markets averaged across the year. Avoid relying on the peak-summer figures developers and agents quote.

List your property for free on immio — one active listing at €0, no credit card.