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New-build yield calculator Buy a plot, build, then let or sell

Result: Positive cash flow, low ROI

Plot · 2 semi-detached homes (example)

Positive cash flow, low ROI
Málaga (Andalucía) · Metropolitan areaPlot 320 m² · €80,000 (€250/m²)2 homes · 200 m² builtLong-term let1 year 10 mo until let

With these figures, the rent covers the mortgage and costs, but the money you put in returns less than 5% a year.

Net monthly cash flow. What you keep each month after paying costs, the mortgage and tax. If it's negative, you top it up from your own pocket.
€557
First year of letting, after tax
Gross yield on cost. Yield on cost: annual rent divided by the total project cost (land, build, professionals, licences and interest).
5.17%
Annual rent / total cost
Return on equity invested. Cash-on-cash: year-1 net cash flow divided by all the money that comes out of your pocket (deposit, taxes, costs, refurbishment and furniture).
2.8%
€235,957 of your own money
Project IRR. IRR (internal rate of return): the equivalent annual return of all your cash flows, including the final sale net of costs, taxes and debt.
Full study
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Full study

See the whole analysis before you invest

With the Free plan you see the verdict and the three key figures. The full study includes:

  • Taxes and income tax in detail
  • IRR and sale scenarios
  • Equity projection
  • Cash curve and timings (land)
  • Sensitivity to interest and occupancy
  • Compare rental types
  • Build or buy finished?
  • Year-by-year table
  • PDF report and share link
  • Save and compare properties
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The PDF report and share links are part of the Basic and Max plans.

Free rental yield Excel template

Compare up to three flats: gross and net yield, mortgage payment, cash flow and approximate income tax. We will email it to you.

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Indicative estimate. Not financial or tax advice.

How it works

How to tell whether building to rent pays off

Building a home to let can earn more than buying one ready-made, but it means more costs and more time. The sum is the total cost (land, construction, professional fees, permits and financing) against the rent you will collect or the price you could sell for.

Reviewed on 9 October 2026

What goes into the total cost

  • The land and its purchase taxes (transfer tax on the plot, notary and land registry).
  • Construction: the built square metres times the cost per m² for the chosen quality.
  • Professional fees: design, site management, health and safety plan, ten-year structural insurance and others.
  • Permits: the building permit and the local construction tax.
  • Utility connections and furniture, and financing during the build (interest and fees).

The formula

Gross yield on cost = one year's rent ÷ total cost. Compare it with buying a ready-made flat in the same area: if building does not clearly earn more, the risk and the wait are not worth it.

Margin if you sell = value of what you build − total cost. The calculator also gives you the IRR from the monthly flows, the cash curve of the build and “build or buy ready-made?”.

Frequently asked questions

How much does it cost to build a house to let?

It depends on the land, the size and the quality. The calculator adds up the land and its taxes, construction, professional fees, permits, utility connections and financing to give you the total cost.

Is it more profitable to build or to buy a ready-made flat?

Building usually gives a higher yield on cost, in exchange for more time and more risk. The calculator compares both options in the same area with “build or buy ready-made?”.

What taxes do you pay when building?

When buying the land, transfer tax (or VAT and stamp duty if a company sells it); during the build, the permit and the local construction tax; and afterwards, income tax on the rent or the taxes on the sale.

Is it free?

Yes: the main calculation is free with no sign-up. The full study (IRR, cash curve, scenarios and PDF report) is paid, from €29 a month.

Cash flow/mo€557
ROI on equity2.8%
Gross yield5.17%