Calculating the rental yield of your property in Morocco is the indispensable step before any investment or before assessing the performance of your existing portfolio. This calculation, which is too often oversimplified, must incorporate all actual expenses to give you an accurate picture of what your investment really earns. Here is the complete method.
Gross Yield vs Net Yield
Confusing gross yield with net yield is the most common mistake in evaluating rental investments. Understanding the difference is fundamental.
Gross yield is the simplest ratio to calculate. It is calculated by dividing annual gross rent received by the total acquisition price, multiplied by 100.
Formula: Gross yield (%) = (Monthly rent × 12 / Acquisition price) × 100
Example: an apartment bought for MAD 900,000 and rented for MAD 5,500/month gives a gross yield of (5,500 × 12 / 900,000) × 100 = 7.33%.
This figure is easy to calculate but misleading: it ignores all the expenses that erode your actual income. Yet it is the figure cited by estate agencies and sellers to make an investment look attractive.
Net yield is the true performance indicator. It deducts all investment-related expenses from annual rent before calculating the ratio.
Formula: Net yield (%) = ((Annual rent - Total annual expenses) / Acquisition price) × 100
Net yield is systematically lower than gross yield, often by 25–40% depending on the property profile and the landlord's tax situation. A 7% gross yield may correspond to a net yield of 4–5.5%.
Expenses to Deduct
To calculate your net yield correctly, you need to identify and quantify all expenses weighing on your rental investment.
Tax charges:
- Income Tax (IR) on property income: calculated on 60% of gross rent (after the 40% flat-rate allowance) at progressive rates
- Municipal Services Tax (TSC): generally 10.5% of the gross rental value in urban areas
- Housing Tax (TH): variable depending on rental value
Management charges:
- Property management agency fees if you delegate: generally 5–10% of monthly rent
- Tenant search and lease drafting fees: to be amortised over the lease term
Co-ownership charges:
- Non-recoverable building common charges: parking, lift, security, green spaces
Insurance:
- Non-occupant landlord insurance
- Rent default insurance (optional but recommended): 2–4% of annual rent
Provisions for works and vacancy:
- Provision for maintenance and repairs: estimated at 1–2% of property value per year
- Provision for rental vacancy: one month's vacancy per year represents 8.3% of annual rent to deduct
Financial charges (if mortgage):
- Loan interest (deductible under the actual-cost regime)
- Borrower insurance premiums
Step-by-Step Calculation Example
Let us apply the method to a concrete case to make the calculations tangible.
The property: 75 sqm apartment, 2 bedrooms, in Casablanca (Maarif district) Acquisition price: MAD 1,100,000 (including notary fees) Monthly rent: MAD 6,500
Step 1 — Annual gross rent: 6,500 × 12 = MAD 78,000
Step 2 — Gross yield: (78,000 / 1,100,000) × 100 = 7.09%
Step 3 — Deducting annual expenses:
- IR on property income (taxable base: 78,000 × 60% = 46,800, average rate ~20%): ~MAD 7,500
- Municipal Services Tax: ~MAD 2,000
- Non-recoverable co-ownership charges: ~MAD 3,600 (MAD 300/month)
- Non-occupant landlord insurance: ~MAD 1,800
- Works provision (1% of MAD 1,100,000): ~MAD 11,000
- Vacancy provision (1 month): ~MAD 6,500
- Total annual expenses: ~MAD 32,400
Step 4 — Annual net income: 78,000 - 32,400 = MAD 45,600
Step 5 — Net yield: (45,600 / 1,100,000) × 100 = 4.15%
In this example, yield falls from 7.09% gross to 4.15% net — a difference of almost 3 percentage points that illustrates the importance of calculating correctly before investing.
Moroccan Yield Benchmarks
To benchmark your property against the market, here are gross yield reference points by city and property type in 2025.
Casablanca:
- Studio / 1–2 bed in prime neighbourhoods (Maarif, Gauthier, Anfa): 5–7% gross
- Family apartment (3–4 bed) in residential areas: 4–6% gross
- Student or university residence: 6–8% gross
Marrakech:
- Guéliz apartment long-term: 5–7% gross
- Medina riad short-term: 8–15% gross (strong seasonality)
- Hivernage apartment long-term: 4–6% gross
Rabat / Salé:
- Apartment in administrative districts: 4–5.5% gross
- Upscale residence Hassan/Agdal: 4–5% gross
Agadir:
- Seaside apartment long-term: 5–7% gross
- Seasonal seaside rental: 6–10% gross (highly seasonal)
Tangier:
- City centre / business district apartment: 5–7% gross (on an upward trend)
These benchmarks are averages: below-market properties (poorly located, poor condition) may have lower yields, and exceptional well-managed properties may exceed these ranges.
Improving Your Yield
Once your yield is calculated, several levers allow you to improve it without necessarily raising the rent.
Reduce rental vacancy: Vacancy is the largest invisible cost. Each month of vacancy represents 8.3% of annual revenue lost. To reduce it, anticipate lease renewals, offer attractive terms to good tenants to retain them, and act quickly as soon as a departure is announced.
Optimise taxation: Switching from the flat-rate regime (40% allowance) to the actual-cost regime when you have significant expenses (loan, major works) can substantially reduce your tax burden and increase your net yield.
Strategically improve the property: A renovated kitchen, modernised bathroom or new appliances can justify a rent increase of 10–20% that sustainably improves your yield.
Diversify towards short-term rental: In tourist cities, well-managed short-term rental can double the yield of a long-term lease. But it requires intensive management or a quality operator.
Automate management: Reducing management costs through tools like SakanAI directly improves net yield. Saving 3% in agency fees by self-managing with automation support improves your net yield by approximately 0.2 percentage points on a property with a 5% net yield — an extra MAD 2,000 per year on a MAD 1 million property.
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