Your apartment's real rental yield: what is left from €800 a month?

Rent of €800 a month does not leave the owner with €800 to spend. The advertised rent does not tell you how profitable the property is or how much cash you will have left. Between the agreed rent and the amount you keep come vacancy, breakdowns, insurance, taxes, administration, mortgage payments and your time. When deciding whether to sell or rent out a home, follow the money through every stage.

Why can gross rental yield be misleading in 2026?

The Bank of Lithuania's 2026 Financial Stability Review provides useful context: early in 2026, house prices were rising by 12–15% annually, while first-quarter rents rose by around 5%. These are national figures, not a forecast for an individual apartment. The arithmetic nevertheless matters: when property value rises faster than rent, the same €800 income is divided by a larger value, reducing the yield.

Use a realistic current market value in the denominator, rather than the price paid a decade ago. Check completed sales as well as listings; our guide to pricing an apartment using completed transactions explains how. The original purchase price matters for tax and your investment history, but it does not show what the capital tied up in the property earns today.

Measures that should be kept distinct

Property finance uses separate measures to show where income goes. The RICS guidance on valuing residential rental property explains net operating income as gross income less the property's operating expenses.

• Gross rental income is the agreed rent before vacancy and expenses.
• Net operating income (NOI) is collected income after property operating expenses, before the owner's income tax and financing.
• Gross yield is annual contractual rent divided by current property value.
• Net operating yield is NOI divided by current property value. It is not yet the owner's final cash flow.
• Cash flow is the cash left after taxes and the full mortgage payment. Return on equity compares the return with the property's value less the outstanding loan.

Repaying mortgage principal reduces your bank balance but increases your equity. Cash flow and return on equity can therefore tell different stories. Show changes in property value separately: appreciation is neither rental income nor guaranteed.

A worked example: what happens to €800 in monthly rent?

This is one model, not a representative apartment for all of Lithuania. The assumptions reviewed on 7 September 2026 are: current market value €180,000; one owner who is a Lithuanian tax resident; the apartment is outside their main-residence regime; official taxable value €160,000; outstanding mortgage €60,000. It is the owner's only property in the relevant non-main-residence tax category throughout the year. It is let to an individual for personal use without a rental business certificate, and no other income changes the tax calculation in this example.

What do the resulting percentages actually mean?

Gross yield is €9,600 / €180,000 = 5.33%. Net operating yield is €7,710 / €180,000 = 4.28%. Cash remaining after income tax and mortgage payments, relative to €120,000 of equity, is just 1.83%. That is the cash return before recognising the €360 value assigned to the owner's time.

Adding the €1,800 of principal repaid during the year to the €2,190 cash flow gives a return on equity, before changes in property value, of (€2,190 + €1,800) / €120,000 = 3.33%. After allowing for the owner's time, it is around 3.03%. This comparison does not establish whether the investment is good or bad. It shows why a 5.33% gross yield does not mean 5.33% of the property value is available as cash.

How do vacancy and repairs change the result?

Illustrative sensitivity comparison. All three scenarios use €800 monthly rent, €490 a year for insurance, administration and property tax combined, €4,200 in mortgage payments and income tax of 15% of rent actually received under the tax assumptions above. Only occupancy and the repair reserve change. The owner's time has not yet been deducted.

The calculation is rent received × 85% − repair reserve − €490 − €4,200. Vacancy is already reflected in rent received; do not deduct it twice. One further vacant month reduces the result by €680 in this 15%-tax illustration, while an extra €1,000 of repairs reduces it by the full €1,000. The model treats the reserve as money set aside rather than freely available to spend; actual repair bills may fall in a different year.

Tax: what to check in 2026

The rental income guidance from VMI, Lithuania's State Tax Inspectorate, describes the ordinary personal income tax regime and, for qualifying residential lettings to individuals, a fixed-tax business certificate. These are separate arrangements. Under VMI's 2026 explanation, a resident landlord letting to an individual for personal use normally declares the income themselves. The relevant combined non-employment income band up to €27,745.80 in 2026 is taxed at 15%. This threshold equals 12 VDU, the statutory average-wage measure used for tax thresholds. Above it, 20%, 25% and 32% rates may apply, taking other income in the annual tax base into account. When renting to a company or an individual using the property for business, the payer normally withholds 15%; this may not settle the final annual liability.

The example calculates income tax at 15% of the €8,800 actually received, not of NOI. Maintenance costs in an economic model do not automatically become deductions for personal rental income tax. Do not apply this model unchanged to accommodation services or lettings under a business certificate. Separately, VMI's property-tax guidance for 2026 sets a 0% band for the first €50,000 of relevant non-main-residence taxable value, 0.2% on the band up to €200,000 and higher rates above that. The example therefore gives (€160,000 − €50,000) × 0.2% = €220. Co-ownership, other properties or a different registered use can change the calculation.

Tax residence also changes the filing process. A non-resident receiving qualifying Lithuanian-source B-class rental income can have to submit FR0459 and pay tax within 25 days of receipt, rather than wait for a resident's annual return. Check the payer and your circumstances against VMI's non-resident guidance. Reporting or tax relief in your country of tax residence is a separate question.

These rules were reviewed on 7 September 2026 and are general information. Before deciding, check current VMI guidance, your taxable value at Registrų centras (Lithuania's Centre of Registers) and your filing obligations. If selling is the alternative, assess property sale taxes separately.

Management is free only if the owner's time has no value

Managing the apartment yourself may save on management fees, but the work remains: advertising, tenant selection, contracts, the handover record, accounts, arranging repairs and communication. Keep a record of hours and assign a realistic opportunity cost to your time. If you employ a manager, enter their fee instead. Periodic refurbishment is also a normal part of operating property, spread across several years, rather than an exceptional surprise.

Our article on the cost of owning a second property gives a fuller breakdown of costs. With a substantial mortgage, model changes in interest and repayments; you may also want to compare selling a mortgaged home.

A practical decision test for the owner

Build three 12-month scenarios: base, favourable and unfavourable. Change the items that can actually vary, such as occupancy, the repair reserve, rent, interest and management. Compare the cash amounts as well as percentages, working hours, liquidity and the risk of concentrating wealth in one asset. A model that works only with twelve occupied months and no repairs has no margin for setbacks.

Finally, consider how much capital a sale would release and what you would use it for. Letting can make sense with modest cash flow if your aim is long-term equity accumulation. Selling may fit better if the released capital reduces expensive debt or serves your wider plans. The calculation should support a decision, not create a promise of precision.

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