How Much Do You Really Keep from Rent? The Complete Net Yield Guide

An investor buys an apartment for 1,200,000 NIS and rents it for 4,500 NIS per month.
The calculation: 54,000 NIS annually divided by 1,200,000 = 4.5% yield.
Sounds reasonable, right?

But in reality, after all expenses, the actual yield is closer to 2.8%.
That gap, nearly 40% less than expected, is the difference between an investment that works and one that stagnates.

Most investors look at gross yield and ignore the number that truly matters: net yield.

"My rent is 5,000 NIS, so I earn 60,000 a year."
This is the most common mistake.

Here's what's missing:
Income tax on rental income (10% reduced rate or marginal tax brackets).
Property tax and running costs during vacancy.
Building and contents insurance.
Ongoing maintenance and repairs (average 3,000 to 8,000 NIS per year).
Brokerage or marketing fees with each tenant change.
Vacancy days (average 3 to 6 weeks per year with self-management).

When you add it all up, actual income is significantly lower than gross.

Here's a real calculation for a 3-bedroom apartment in Petah Tikva.

Baseline data:
Purchase price: 1,500,000 NIS.
Monthly rent: 4,800 NIS.
Annual gross income: 57,600 NIS.
Gross yield: 3.84%.

Annual expenses:
Income tax (10%): 5,760 NIS.
Building insurance: 1,200 NIS.
Maintenance and repairs: 4,500 NIS.
Vacancy (one month): 4,800 NIS.
Brokerage fee (annualized): 2,400 NIS.
Total expenses: 18,660 NIS.

Net income: 38,940 NIS.
Net yield: 2.6%.

The gap between 3.84% and 2.6% is nearly a third of the yield.
That's money disappearing without the investor noticing.

1. Reduce Vacancy Days
Every week without a tenant costs over 1,000 NIS.
Correct pricing from day one and professional marketing shorten vacancy to 18 days on average.

2. Preventive Maintenance
An annual property inspection saves expensive repairs.
A small 500 NIS fix prevents 5,000 NIS of damage.

3. Data-Driven Pricing
Don't guess — check what the market actually pays.
Accurate pricing fills units fast and attracts quality tenants.

4. Choose the Right Tax Route
The 10% flat rate isn't always the best option.
Sometimes marginal tax with expense deductions saves more.
Consult an accountant once a year.

5. Ongoing Financial Tracking
A periodic 360 Report shows exactly where money goes.
Without tracking, you're managing blind.

At Flamingo, every property is managed with a clear goal: maximize what the owner keeps at the end of the month.

How it works in practice:
Pricing based on up-to-date market data.
Professional marketing that fills units within 18 days on average.
Collection with a 98.7% success rate.
Preventive maintenance that reduces repair costs by 40%.
Transparent performance reports through the personal portal.

The result: investors managed through us see net yield 15% to 25% higher compared to self-management.

What's the difference between gross and net yield?
Gross yield is calculated as annual rent divided by property price.
Net yield deducts all expenses: tax, maintenance, vacancy, insurance, and management.
The net number is the only one that reflects real profit.

What's a reasonable net yield for a property in Israel?
A range of 2.5% to 3.5% net is considered reasonable.
Above 3.5% net is considered excellent and requires professional management.

How do you calculate yield with a mortgage?
Separate the return on equity from the return on property value.
Leverage affects both sides: profit and risk.

Do management fees hurt yield?
Professional management fees range from 5% to 8% of rent.
But professional management reduces vacancy, repairs, and collection issues, so net yield actually increases.

An investor who doesn't calculate net yield makes decisions based on inaccurate numbers.
It's like driving without a speedometer.

The number that matters isn't how much rent you receive.
The number that matters is how much you keep after everything.

Accurate calculation, smart management, and ongoing tracking are the difference between an investment that works and money just sitting there.

Leave your details and we'll help you run a professional analysis.
We'll review all expenses, calculate precise net yield, and show you exactly where you can improve.