The truth about your 'investment' apartment: real Sofia rental yields in 2026
April 9, 2026"Buy an apartment — there's no safer investment." You've heard it from parents, colleagues, brokers, random people at birthday parties. In Bulgaria, real estate is almost a religion — something you "can't lose on."
But is it true? We're not talking about the home you live in — that value is personal and hard to quantify. We're talking about the investment apartment — the one you buy to rent out and "make money."
Let's do the math. With real numbers from Sofia, 2026.
The gross calculation
A typical two-bedroom apartment (65 m²) in a decent Sofia neighborhood:
| Parameter | Value |
|---|---|
| Purchase price | EUR 150,000 (BGN 293,375) |
| Average monthly rent | EUR 650 (BGN 1,271) |
| Annual rent (gross) | EUR 7,800 |
| Gross yield | 5.2% |
Average rent for a two-bedroom in Sofia in early 2026 ranges from EUR 500 to EUR 1,000 per month — depending on the neighborhood, condition, and furnishing. We use EUR 650 as a realistic midpoint for a furnished apartment in neighborhoods like Mladost, Lyulin, or Studentski Grad.
At first glance, 5.2% gross sounds decent. But from that amount, you need to subtract everything you pay as an owner.
What eats into net yield
Here are the real annual costs for a landlord renting out a property:
| Cost | Annual | Note |
|---|---|---|
| Vacancy (empty month) | EUR 650 | 1 month without tenant — turnover, repairs, search |
| Building maintenance | EUR 600 | ~EUR 50/mo for common areas and entrance fee |
| Minor repairs reserve | EUR 500 | Boiler, faucet, appliances |
| Property tax | EUR 113 | 1.875 per mille on tax assessment ~EUR 60,000* |
| Garbage collection fee | EUR 96 | 1.6 per mille on tax assessment* |
| Property insurance | EUR 200 | Basic property insurance |
| Rental income tax | EUR 702 | 10% on 90% of gross rent (Bulgarian PIT) |
| Total costs | EUR 2,861 |
Net annual income: EUR 7,800 − EUR 2,861 = EUR 4,939
But wait — yield isn't calculated against the apartment price alone. It's against all the money you've invested:
| Investment | Amount |
|---|---|
| Purchase price | EUR 150,000 |
| Closing costs (taxes, notary, fees) | ~EUR 8,000 |
| Renovation and furnishing | ~EUR 8,000 |
| Total investment | ~EUR 166,000 |
Net yield: EUR 4,939 / EUR 166,000 = 2.98%
Rounded — about 3% net annual yield.
Check total purchase costs with our calculator: Total cash for an investment two-bedroom →
The opportunity cost of your down payment
Say you buy without a mortgage — all cash. You invest EUR 166,000. What would that money earn elsewhere?
| Alternative | Expected annual return | Annual income on EUR 166,000 |
|---|---|---|
| Bank deposit (BG, 2026) | ~2.0–2.5% | EUR 3,320 – EUR 4,150 |
| Global index fund (ETF) | ~7% long-term | EUR 11,620 |
| Investment apartment (net) | ~3.0% | EUR 4,939 |
The average deposit interest rate in Bulgaria is about 0.8% (BNB data, Q3 2025), but promotional offers reach 2.0–2.5%. A global index fund (e.g., MSCI World) historically returns ~7% annually over 10+ year periods — no guarantee, but with liquidity and diversification.
In other words: net rental yield in Sofia is comparable to a bank deposit — and significantly lower than long-term index fund investing. And with a deposit, you don't deal with repairs, tenants, and sleepless nights.
Annual return on EUR 166,000 invested
If you buy with a mortgage, the math gets more complex: you're using leverage (other people's money), but you're paying interest. At current rates of ~2.5% and above, interest payments eat a significant chunk of rental income.
When an investment apartment actually is an investment
It's not all pessimism. There are scenarios where property genuinely is a smart investment:
Leverage at low rates. If you take a mortgage at 2.5% and net yield is 3%, the spread is thin — but you control a EUR 150,000 asset with EUR 30,000 down. If the property appreciates 5% annually (as Sofia saw in 2024–2025), the gain applies to the full value, not just your EUR 30,000. That's the magic of leverage — but it works both ways.
Inflation hedge. With inflation at 4–5% (Bulgaria's 2025 figure per NSI), rents and property prices generally rise. A 2% deposit at 5% inflation loses real value. Property — not necessarily.
Forced savings. People who don't invest consistently often spend their free cash. A mortgage is "forced savings" — every month you pay down principal, albeit slowly at first.
Tax arbitrage. The 9% effective tax on rental income (10% on 90%) is one of the lowest in the EU. For comparison, capital gains tax on ETF profits in Bulgaria is 10%.
But: none of the above makes property automatically "the best investment." The right answer depends on your situation — how much cash you have, your time horizon, your risk tolerance, and whether you have the discipline to invest the alternative.
Check your own case
The numbers above are for an "average" two-bedroom. But your situation is different — different price, different neighborhood, different down payment percentage.
Instead of guessing, calculate:
- See all costs for buying an investment property →
- Just the costs, no income — how much cash do you need →
The calculator shows all costs — taxes, notary, insurance, renovation, and monthly payments. Not just the mortgage installment.
An investment apartment isn't a bad investment. But it's not magical either. ~3% net yield is the reality for most Sofia properties — and it's comparable to a bank deposit. The real profit comes from property appreciation, but that's not guaranteed and depends on when you buy.
Before you buy "for investment," do the math. With real numbers, not hopes.
Want to see the exact numbers for your case?
Calculate with the BYB calculator