Method · Making sense of the figures

Gross rental yield: what it is good for, what it hides

Gross rental yield is the first figure any investor looks at, and the most widely misused. Here is how it is calculated, what it lets you compare, and the gap between that figure and what actually reaches your account.

Published July 22, 2026 · 5 min read

1. The formula

Gross rental yield measures one year of rent against the purchase price of the property.

Gross yield = (monthly rent × 12) ÷ purchase price × 100

An apartment bought for MAD 1,000,000 and let at MAD 6,000 a month brings in MAD 72,000 over twelve months, or 7.2% of the price paid. Nothing more elaborate than that.

Its strength lies in that simplicity: two figures are enough, both are public, and the result can be compared from one neighbourhood to the next. Its weakness lies in the same simplicity: it ignores everything that happens between the advertised rent and the money left in your account.

2. Two apartments, two calculations

Take two properties actually on sale in July 2026, one in Casablanca, one in Rabat. Rents are not known at property level, so we apply the neighbourhood's median rent per m², measured on rental listings from the same month.

2.1. Casablanca — Maarif, 130 m²

A four-room, 130 m² apartment is listed at MAD 1,850,000, or MAD 14,231 per m². The median rent in Maarif stands at MAD 106/m²/month.

Estimated annual rent: 106 × 130 × 12 = MAD 165,360
Gross yield: 165,360 ÷ 1,850,000 = 8.94%

2.2. Rabat — Hay Riad, 146 m²

A four-room, 146 m² apartment is listed at MAD 3,650,000, or MAD 25,000 per m². The median rent in Hay Riad stands at MAD 112/m²/month.

Estimated annual rent: 112 × 146 × 12 = MAD 196,224
Gross yield: 196,224 ÷ 3,650,000 = 5.38%

3. What the comparison shows

The Rabat apartment rents for more than the one in Casablanca: MAD 16,352 a month against 13,780. Yet it yields three and a half points less.

The explanation fits in one line: rents per m² are almost identical in the two neighbourhoods, 106 against 112 dirhams, while sale prices run from one to nearly double, MAD 14,231 against 25,000 per m².

The denominator is what drives the result. Within a given market, rents vary far less than purchase prices — the former are capped by what tenants can pay, the latter by what buyers expect. A sought-after neighbourhood commands a premium on purchase without rents following in the same proportion, and its yield suffers mechanically.

For the Hay Riad property to match the yield of the Maarif one, it would have to be negotiated down to around MAD 2,195,000, some 40% below the asking price. Or let at MAD 27,190 a month, two thirds above the local market. Neither is plausible: the yield gap is not an anomaly waiting to be corrected, it is the structure of the market.

The same holds between cities. Across the neighbourhoods we track in June 2026, the median stands at 7.88% in Casablanca against 5.92% in Rabat.

4. From gross to net: the missing items

Gross yield assumes you collect twelve full months of rent with no costs whatsoever. No property behaves that way. Take the Maarif case again, with deliberately unremarkable assumptions.

Starting point: MAD 165,360 in annual rent.

• Void periods. One month between two tenants is an ordinary scenario, not a pessimistic one: −MAD 13,780.
• Non-recoverable service charges, around MAD 400 a month: −MAD 4,800.
• Maintenance and repairs. A provision of 5% of rent covers paintwork, plumbing and replacing a water heater: −MAD 8,268.
• Letting management, if you delegate it — common when you live abroad — around 8% of rent collected: −MAD 12,126.

That leaves roughly MAD 126,400, or 6.83% of the purchase price. The yield has shed two points before the first dirham of tax.

4.1. And tax

Rent from unfurnished residential property falls under property income. The standard mechanism applies a flat 40% allowance to gross rent, then the progressive income tax scale to the net amount. The 2025 Finance Act raised to MAD 40,000 a year the threshold below which net property income is not taxed. An option exists for a 20% final withholding on gross rent, but it requires the tenant to operate withholding at source, which in practice rules out letting to a private individual.

In our example, MAD 165,360 in rent produces MAD 99,216 of taxable net property income, to be run through the scale. The amount due depends on your other income and your tax residence: a question for a tax adviser, not for a blog post.

4.2. Acquisition costs

One last routine omission: yield is almost always calculated on the asking price, never on the amount actually paid out. Registration duty, land registry fees and notary fees add somewhere in the region of 6 to 8% to the price — have the notary quote them before you make an offer. Measured against that full cost, the Maarif yield falls back to around 8.3% gross.

5. How to use it without going wrong

Gross yield is a screening tool, not a revenue forecast. It answers one question well: among several neighbourhoods, which ones deserve my time? It answers badly the one everybody asks it: how much will I make?

Three precautions.

First, only compare yields calculated the same way. A figure derived from a neighbourhood's median rent and a figure derived from a signed lease do not measure the same thing.

Second, be wary of high yields. A neighbourhood at 11% is not handing out gifts: it signals contained sale prices, therefore weak buying demand, often a slower resale and a higher risk of arrears. Yield pays you for risk, it does not remove it.

Third, on a thinly covered neighbourhood, draw no conclusion. We only publish a price once a neighbourhood has at least 30 listings in the month, on both the sale and rental sides. Below that, the median swings on two or three unusual listings.