Buying to rent: from gross rental yield to what you actually keep

To illustrate this with a real example, let’s look at an apartment we currently have for sale: unit 304 in the Zandoli building, in Barrio Jara, Asunción. It has one bedroom and a parking space, and is rented until June 23, 2027.

What is rental yield?

Rental yield shows how much your investment generates in rent over one year, relative to the amount invested. It is expressed as an annual percentage.

For example, if you buy an apartment for USD 100,000 and receive USD 7,000 in annual rent, the gross rental yield is 7% per year: for every USD 100 of the purchase price, you receive USD 7 a year before expenses.

The difference lies in which expenses are deducted:

• Gross rental yield: considers rental income before expenses.
• Net rental yield: considers what remains after deducting the owner’s expenses and applicable taxes, using the total acquisition cost as the investment base.

The formula is:

Annual yield (%) = relevant annual income ÷ capital invested × 100

This percentage measures the return from renting the property. It does not include any gain or loss from selling it.

Let’s see how it works for apartment 304 in Zandoli.

The starting figures

Item	Amount
Sale price	USD 89,000
BCP exchange rate on September 8, 2026	Gs 5,899.02 per dollar
Price converted into guaraníes	Gs 525,012,780
Reported monthly rent	Gs 3,400,000
2026 property tax, apartment and parking space	Gs 834,700 per year
2026 special municipal levies, apartment and parking space	Gs 945,600 per year
Condominium fees according to the September 2026 statement	Gs 419,951 per month

For this example, we use the sale price as our investment base, without adding acquisition costs. We also use the reported rent without deducting any VAT that may be included in that amount. Both points should be checked before finalizing an investment calculation.

Step 1: calculate the gross rental yield

This is the annual rent divided by the sale price, multiplied by 100.

• Annual rent: 12 × 3,400,000 = Gs 40,800,000
• Gross rental yield: 40,800,000 ÷ 525,012,780 × 100 = 7.77%

This percentage assumes twelve months of rent collected and does not yet deduct any owner expenses.

Step 2: deduct municipal taxes

Property tax and special municipal levies total Gs 1,780,300 per year.

• 40,800,000 − 1,780,300 = Gs 39,019,700
• 39,019,700 ÷ 525,012,780 × 100 = 7.43%

Step 3: deduct condominium fees

In this case, the owner pays the condominium fees. The monthly amount was Gs 419,951 in both May and September 2026. To estimate the annual expense, we project the latest available amount over twelve months:

12 × 419,951 = Gs 5,039,412 per year.

Future statements may vary, and additional special assessments may apply.

• 39,019,700 − 5,039,412 = Gs 33,980,288
• 33,980,288 ÷ 525,012,780 × 100 = 6.47%

This 6.47% is the yield after municipal taxes and condominium fees, before other expenses and applicable taxes.

The difference from the gross rental yield is approximately 1.3 percentage points, equivalent to Gs 6,819,712 per year.

What still needs to be deducted

To get closer to the final net rental yield