Balearic rental yield calculator

Three yield numbers, three different questions

• Gross yield = annual revenue ÷ purchase price. Vanity metric — ignores costs. Useful only for back-of-envelope comparison across properties.
• Net yield = (revenue − all operating costs) ÷ purchase price. The 'what does this property earn?' number. Should be 4-7% in the Balearics depending on island and ETV status.
• Cash-on-cash = annual cash flow ÷ cash invested. The 'what does my money earn?' number. With leverage (mortgage), can be much higher than net yield — but also much lower if rates rise.

ETV is the swing factor

A property with a valid, transferable ETV licence in Mallorca's south or NE coast can clear €30K-€80K of net rental in a single summer (12-22 weeks at €2,000-5,000/wk). The same property without ETV is restricted to long-term rental at €2,000-3,500/mo — €24-42K/year, often less after vacancy.

Confirm the ETV is real before you bake it into your investment thesis. Use our ETV verification database to look up any specific licence.

What the calculator doesn't model

• Vacancy / seasonality risk — STR yields are concentrated in 12-20 summer weeks; a bad summer (weather, supply glut, regulation) hurts. Stress-test by cutting your weekly rate or occupancy by 30%.
• Capital appreciation — Balearic property has appreciated 5-9%/yr on average in foreign-buyer segments. Real total return = cash yield + appreciation, often double the cash-on-cash number alone.
• Tax structure optimization — buying through a Spanish SL changes the deductibility math. Worth modelling with a tax advisor for €1M+ purchases.
• Currency hedge — non-EUR earners pay in GBP/USD/CHF, which moves vs EUR. A 10% FX swing is equivalent to 1-2 years of net yield.