Should you be cautious of rental yields advertised by sellers?

"This property generates a 6% yield." "Certified Airbnb income of €4,500 per month." "Guaranteed 5% return for 3 years." These claims are common in the Portuguese property market. Here's how to interpret them.

Gross yield vs. net yield: the key difference

The advertised yield is almost always a gross yield, calculated using gross rental income divided by the purchase price, without deducting any expenses.

The actual net yield, after taxes (28% IRS for a non-resident), condominium fees, IMI, insurance, management fees and vacancy periods, is consistently 40 to 50% lower than the advertised gross yield.

"Certified" Airbnb income: verify it carefully

Request the IRS tax returns for the past two to three years (including declared AL income), platform statements from Airbnb or Booking.com covering the same period, and supporting documents for deductible expenses.

Without these documents, the advertised figures are estimates with no contractual value.

"Guaranteed returns": the questions to ask

Programmes offering a "guaranteed return" commit to paying a fixed rental income for a defined period.

Three important questions should be asked: who is actually providing the guarantee? What happens if the guarantor defaults? Is the guaranteed return partly financed by an inflated purchase price?

The three-step verification rule

Whenever a yield is advertised, request tax documents confirming the declared income, calculate the net yield yourself by deducting all actual expenses, and compare the figures with available market data.