Updated
GL-B-07
Glossary · Real estate
Buy-to-let - buying to rent out, where net yield counts, not the promised one
01 / In 30 seconds
The short answer
- What it is
- Buying property not to live in but to let
- Where the income comes from
- Rental payments plus possible growth in the property’s value
- What to calculate
- The net yield after all costs, not the gross yield
- What is forgotten
- Taxes, management, maintenance, repairs and void months
- Important for programmes
- Some programmes restrict letting a property bought under them
02 / In plain words
What Buy-to-let means
Buy-to-let is buying property not to live in yourself but to let. The logic of the investment is clear: the property brings in regular rental income and may grow in value at the same time. For many people this is the first way into foreign real estate.
The main calculation mistake is relying on the gross yield shown in the seller’s materials. The real picture emerges after deducting all costs: tax on rental income, property tax, service charges, the management company’s fee, insurance, routine repairs and, above all, void months between tenants.
A separate point for our clients: if a property is bought as part of an immigration programme, the rules on its use may be restricted. Some programmes expressly prohibit or restrict letting the property during the holding period. This is found out before the deal, not after the expected income has already been calculated.
A case from practice
A client was shown an attractive yield on a property. After deducting taxes, service charges, the management company’s fee and a couple of void months, the picture became considerably more modest. The client then made the decision on realistic figures.
When it is considered
- An investment in foreign real estate
- Passive income in foreign currency
- A property for a Golden Visa
- Diversifying investments across countries
- A home for a future move
- Long-term preservation of capital
03 / What it covers
What to include in the calculation
Income
- Rental rate
- Occupancy during the year
- Growth in the property’s value
Costs
- Tax on rental income
- Maintenance and utilities
- Repairs and furniture
Management
- The management company’s fee
- Finding tenants
- Dealing with problems on the ground
Restrictions
- The programme’s rules
- Local rental regulation
- Short-term letting and licences
04 / How it works
How to approach the calculation
Assess the real rental rate
What similar properties nearby actually rent for.
Calculate all costs and void periods
Taxes, service charges, management, repairs, vacancies.
Check the programme’s restrictions
Whether letting is allowed during the holding period.
Choose a management model
Yourself or through a management company.
Calculate the net yield
The decision is made on figures after all deductions.
05 / Key facts
What you need to know
01What it is
Property to rent out
The property is bought not to live in but for rental income and possible price growth.
02What to calculate
Net yield
After rental and property taxes, service charges, management, insurance, repairs and vacancies.
03Taxes
In the property's country
Rental income is taxed where the property is. Short-term letting is often regulated separately.
04Programmes
May restrict letting
Some immigration programmes ban or restrict letting the property during the holding period.
Common mistakes
Using the seller's yield figures
Recalculate the income after all costs and taxes.
Not allowing for vacancies
Build months without a tenant into every year's calculation.
Not checking short-term letting rules
Check the licence requirements and local restrictions before buying.
Letting a property bought under a programme that forbids it
Check the programme conditions before the deal.
06 / Expert advice
How to prepare in advance
The calculation is built on net yield: take a realistic rate for the particular area, deduct all costs and allow for void periods. Local regulation is checked separately — in many cities short-term letting requires a licence or is prohibited. And before the deal, letting plans are checked against the conditions of the immigration programme.
What we do for you. We calculate the yield realistically: with taxes, maintenance, management and void periods. And we always check whether your programme allows the property to be let — so that the investment plan does not diverge from the immigration conditions.
Robert HaasHead of Company Formation
07 / Questions
Frequently asked questions
Buying property to let rather than to live in yourself. The income comes from rent and possible growth in value.
Gross yield is rental income relative to the price, without costs. Net yield is calculated after taxes, maintenance, management and void periods.
Tax on rental income, service charges, the management company’s fee, repairs and void months between tenants.
As a rule, yes — in the country where the property is located, and sometimes in your country of tax residence too. This is calculated in advance.
Not always. Some programmes restrict or prohibit letting during the holding period. The conditions are checked before the deal.
In many cities it is regulated separately: licences are required, there are limits on the number of days, or it is banned outright in certain zones.
INITIAL ASSESSMENT
Tell us what outcome your family needs
We will design a solution for your case, choose the country and the right status, and take the whole process through to the result.
