Buy once and the rent arrives on its own? Vacancy, management, seasonality, rules, tax and guaranteed-yield schemes decide what you really keep.
The idea is attractive: you buy an apartment abroad once, hand over the keys, and a monthly transfer arrives for years. Brochures and some sales presentations show a yield percentage as if it were an interest rate. In practice rental income is the result of a small business that you own, and it can be good, modest or negative depending on the market, the property and the way it is run.
The myth
The myth has two parts: the income is "passive" (no work, no attention) and "guaranteed" (the number on the presentation will be paid). People believe it because gross yields are easy to calculate and easy to advertise: annual rent divided by price. Residents of the EU who earn in euros also compare the figure with a bank deposit and conclude that property is simply a better deposit.
What is actually true
Gross yield is not what lands in your account. Between the headline figure and your net income stand several layers:
- Vacancy. Between tenants or outside the season the property earns nothing, while the costs continue.
- Management. A local company or an individual who finds tenants, handles check-ins, repairs and complaints charges a fee, typically a percentage of rent or a fixed amount; see property management companies abroad.
- Running costs. Community or building charges, property tax, insurance, utilities during empty periods, repairs and furniture replacement.
- Seasonality. Resort markets earn most of the year's rent in a few months, so a yearly average hides long quiet periods.
- Regulation. Short-term letting is licensed or restricted in a growing number of places, and rules can change after you buy.
- Tax. Rental income is usually taxable in the country where the property is, and often also reported in the country where you live; the final burden depends on the treaty. See rental income abroad: tax for EU residents by country.
For a fair comparison with a deposit, use net figures after costs and tax, as in rental yield vs deposit interest after tax and costs. A deposit has no vacancy; a flat can lose a quarter of a year to it.
An illustration (hypothetical, round numbers): a flat bought for 100,000 and advertised at 8% gross brings 8,000 of rent on paper. If it is empty for two months, a manager takes a share, building charges and tax are paid, the net result can be far below 8,000, and a single large repair can wipe out a year. The point is the mechanism, not the numbers.
Where the myth comes from or is partly right
There is a true kernel. Long-term letting of a well-located, well-kept flat to a local tenant with a solid contract can require little day-to-day work once a good manager is in place, and the income can be stable. "Low effort" is realistic; "no effort and no risk" is not. A management company reduces your time, but it does not remove vacancy, repairs or regulation, and you still need to supervise it from a distance.
Guaranteed-yield schemes are the most dangerous version of the myth. A developer or operator promises a fixed percentage for a number of years, sometimes with a buy-back. The promise is only as good as the company that gives it, and the price of the property often already contains the "guarantee". We explain the typical mechanics in guaranteed rental schemes: the catch and in guaranteed returns and too-good-to-be-true offers. A guarantee is a contract claim against a company, not a property of the flat.
Country examples
Spain: short-term tourist rentals are regulated by regions and cities. Barcelona has announced that the licences of about 10,000 tourist flats will not be renewed after November 2028, which the city presents as part of its housing policy (see the Barcelona city council tourism page). A buyer who counts on holiday letting there should read the current rules before paying.
Spain, national level: since 1 July 2025 a registration number is required for short and seasonal rentals advertised on online platforms, linked to EU Regulation 2024/1028 (reported by Spanish media; check the Ministry and regional registers).
Portugal: Decree-Law 76/2024 (in force 1 November 2024) lets municipalities restrict or suspend new "Alojamento Local" licences in contention areas and requires justified owner-majority decisions for condominium objections, as reported by law firms. Whether a flat can be let to tourists depends on the municipality and the building.
Germany: letting is mostly long-term with strong tenant protection, which gives stability but limits rent increases and the ability to end a contract; details vary by city, and we have not verified current local caps here.
Resort markets such as Cyprus, Greece, Turkey or Thailand: income is highly seasonal, and the effective yield depends on occupancy; treat any occupancy figure that is not backed by past statements of the same property as an assumption.
How to act safely
- Calculate net yield from your own assumptions: vacancy, management, charges, tax, repairs. Ask for the real statements of the same building or similar flats.
- Check whether the intended letting type (short-term or long-term) is allowed for this exact flat and by the building rules, today and in the town's plans.
- Read the management contract: fee, what is included, who pays for repairs, reporting, termination.
- Treat any guaranteed yield or buy-back as a loan-like claim on the company: check its accounts, who stands behind it and what happens if it stops paying.
- Find out where the rent is taxed and how it is reported in your country of residence before you buy.
- Keep a reserve for empty months and repairs.
FAQ
Is rental income abroad ever passive? It can be low effort with a good manager and a long-term tenant, but it still needs supervision, and results are not guaranteed.
Does a "guaranteed 8% for five years" offer protect me? Only as far as the issuer can pay. Read the contract, check the company and see whether the guarantee is already priced into the property.
Is gross yield useful? Only for a first filter. Compare net yield after costs and tax.
Can the rules for tourist rentals change after I buy? Yes, in several countries they have changed; check current local rules and trends before signing.
Do I pay tax twice? Usually the tax is paid in one country with relief in the other under a treaty, but the method depends on the countries; ask a tax adviser.
How we help
We are a trilingual platform (Russian, Polish, English) that finds properties abroad and coordinates independent local lawyers and tax advisers. We can help you compare net-income assumptions and find managers and lawyers to read the contracts. This text is informational and is not legal, tax or investment advice, and no income is guaranteed; verify current rules in the country concerned. See also the series hub: remote buying: myths and facts.