Gross Yield vs Net Yield: The Critical Difference
North Cyprus properties are almost always marketed with gross rental yields. The net yield — what you actually receive after costs — is typically 2–3 percentage points lower. Understanding this distinction is the most important financial skill for any North Cyprus investor.
Gross Rental Yield
Gross Yield = (Annual Rent / Purchase Price) × 100
Example: Apartment at £150,000, rent £1,000/month = 8% gross yield
Net Rental Yield
Net Yield = ((Annual Rent − Running Costs) / Total Investment) × 100
Worked example:
- Annual rent: £12,000
- Service charges (Aidat): −£1,800/year
- Property tax: −£300/year
- Maintenance reserve (2%): −£3,000
- Property management (10%): −£1,200
- Vacancy allowance (5%): −£600
- Net annual income: £5,100
- Purchase price + 12% costs: £168,000
- Net yield: 3.0%
Realistic Return Expectations by Rental Model
Short-term rental (Airbnb/holiday let):
- High season (June–September): £80–£200/night
- Average occupancy: 55–70%
- Gross yield: 9–12% · Net yield: 5–7%
Long-term rental (12-month contract):
- Stable income, less management burden
- Gross yield: 7–9% · Net yield: 4–6%
Student rental (Famagusta):
- High demand from three universities
- Gross yield: 8–10% · seasonal vacancy risk
Calculating Your ROI
ROI (years) = Total Investment / Net Annual Income
Realistic example:
- Total investment (£150,000 + 12% costs): £168,000
- Net annual income: £7,500 (4.5% net)
- ROI: 22.4 years
The ROI figures shown on listings are based on gross yields under optimistic assumptions. For your own planning, use 15–22 years as a realistic range.
Capital Appreciation: The Bonus Layer
North Cyprus property prices rose an average of 12–18% p.a. from 2020–2025, driven by growing international demand, limited buildable land in prime locations, and infrastructure investment. This appreciation materially improves overall returns — but treat it as a bonus, not a guarantee.
Summary
- Use net yields for comparison: 4–6% p.a. is realistic
- Your real ROI horizon: 18–22 years from rental income alone
- Ask for the full cost breakdown on every listing — not just the headline gross yield
- Appreciation is real but unpredictable — don't underwrite your purchase on it
Our AI advisor can build a full return model for any specific project with your assumptions.
