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Real Estate Investment : How to calculate the rental profitability of a luxury chalet ?

Real Estate Investment : How to calculate the rental profitability of a luxury chalet ?

Investing in a mountain chalet is an operation that can be advantageous in many ways. However, in order to secure your investment, it is important to calculate the rental profitability of the chalet beforehand. You don't know how to proceed? Michaël Zingraf Real Estate's professionals can answer all your questions about the return on your future property.

What is the rental profitability of your chalet?

Calculating the profitability of your future rental property investment is essential in order to be able to accurately estimate the potential of your investment in property. This operation will therefore enable you to know the profit you can make (in percentage) from renting out your chalet. The higher the profitability, the better the investment.

  • To find out the gross rental yield of your chalet, apply the following formula:
    - (Amount of rent x 12 months) x 100 / by the purchase price including acquisition costs
  • To find out the net rental yield of your chalet, the following formula should be applied
    - (Amount of rent x 12 months) x 100 - (rental charges) / by the purchase price

If you wish to have a professional manage the rental of your chalet, you will also need to add the estate agent's fees. The cost of the mortgage should also be included in the net rate of return. Entrust your rental investment project to our professionals, and although calculating the rental profitability of a property is not very complex, it is recommended to entrust the operation to a professional in order to get a real idea of the return that your investment could bring you.

The author

Michaël Zingraf Christie's International Real Estate / Marine SCHMITT

Maud CANEVET

Marketing & Communication Officer

Michaël Zingraf Christie's International Real Estate

m.canevet@michaelzingraf.com