Rental yield in Sofia: why the numbers you see online don't match

If you're looking for a rental property in Sofia, you've probably already run into a confusing spread of yield numbers. One source says under 4%, another says 5-7% for what looks like the same type of apartment. Both can be calculated correctly and still be easy to misread if the assumptions behind them aren't explained. Honesty with clients is a core principle for us, so in this article we explain where the gap comes from and how to reach a realistic estimate of your own, instead of relying on a single number from an ad.

Why the published numbers vary so much

The gap usually comes down to three things. First, some analyses calculate yield on a nationwide Bulgarian average, while others focus on Sofia specifically, where property prices are higher - and a higher property price automatically lowers the yield percentage even at a similar rent. Second, some sources show gross yield (rent divided by property price), while others already subtract taxes and costs and show net yield, a number that's lower by definition. Third, some analyses use advertised asking rents instead of rents actually being paid, which often inflates the result. So when you see a specific percentage online, the first question worth asking is: is this gross or net yield, and does it actually refer to Sofia?

Gross versus net yield - what they actually mean

Gross yield is the simplest calculation: annual rent divided by the purchase price of the property. If you buy a two-bedroom apartment for around EUR 155,000 (at an average price of roughly EUR 2,400 per sq.m in Sofia) and rent it out for around EUR 600 a month - a typical rate for a two-bedroom apartment right now - annual rent is EUR 7,200, and gross yield works out to around 4.6%. That number doesn't account for a single cost of owning and renting out the property, though, so it's only a starting point, not a real measure of return.

How you get to the real net yield

Net yield subtracts the actual costs of the property from annual rent. In Bulgaria, an individual's rental income is taxed at 10% on 90% of the rent received (a flat 10% recognized-expenses deduction, no receipts required) - an effective tax burden of around 9% of gross rent. Add the annual local property tax and waste-collection fee (the amount depends on the property's tax assessment value and district), typically at least around a month of vacancy between tenants over the year, and ongoing maintenance and minor repairs. If you use an agency to manage the rental, add their fee too - usually around 8-10% of rent. For the example above, after tax, about a month of vacancy, and maintenance, net yield drops to around 3.2-3.6% a year - close to the more conservative estimates published online, and considerably closer to reality than an advertised 6-7%.

What determines the yield on a specific property

Averages hide real differences between individual properties. Smaller apartments (studios and one-bedrooms) usually carry a higher yield percentage relative to their price, because rent per square meter is higher at a smaller size - but they come with more frequent tenant turnover and a higher share of vacant periods. Larger family apartments give a lower yield percentage but more stable, long-term tenants. New construction usually carries a purchase-price premium that isn't always fully offset by higher rent, while older but well-maintained properties in the center or near a metro station often offer a more balanced price-to-rent ratio.

There's no single universal number that answers how much you'll earn from renting out a property in Sofia - only a realistic calculation for the specific property, based on real figures rather than advertised ones. At New Key Properties we'd rather show you an honest projection based on actual rental levels in the specific neighborhood than promise a yield we could hardly deliver in practice. If you're considering buying a rental property in Sofia, call 0879 826 292 for a free consultation and a realistic estimate for the specific property you're looking at.