What's the difference between gross and net yield?
Gross yield = annual rent ÷ purchase price only, with no deductions. Net yield subtracts operating expenses and vacancy from rent, and divides by the total acquisition cost (including the real estate transaction tax and purchase costs). The difference between them can be substantial — two properties with the same gross yield can have very different net yields depending on their actual expenses.
Is the Real Estate Transaction Tax (RETT) always paid by the buyer?
Usually yes, the buyer bears it at 5% of the transaction value in most Saudi real estate deals, and it's typically handled during the notarization process. Confirm exactly how it's calculated in your specific contract, since some agreements may split it differently between parties.
Why is my cash-on-cash return higher than the net yield?
Because of leverage — you're calculating the return on a small fraction of the property's value (just your down payment), while the income is generated from the property's full value. This amplifies your return percentage on the actual capital you put in, but it equally amplifies the risk: if rent drops or expenses rise, you still must cover the fixed financing payment regardless of the property's actual performance.
What's a reasonable vacancy rate to assume?
It varies significantly by property type, location, and local market conditions, and there's no universally correct number. Check comparable data in the same neighborhood or consult a local real estate agent for a realistic estimate, rather than using an arbitrary number — that's specifically why this field is left optional in the calculator.
