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Real returns · Part 1 of 2
How much does an apartment in Asunción really earn? Gross yield, net yield and the full picture
It's common to see apartments in Asunción advertised with a 10% annual return. It sounds great. But once you do the full math, with everything you pay in Paraguay to keep an apartment rented, that number is very hard to reach. To understand why, let's start from the beginning.
What is a return?
A return is how much an investment gives back for every dollar you put in. It's expressed as a percentage per year.
It's the number that tells you whether a deal is good or not. An apartment that rents quickly and at a good price can still earn little if you overpaid for it. And a simple one can be a great buy if the price was right. Without calculating the return, you're deciding on intuition.
Gross yield and net yield
There are two ways to do that math, and they give very different results.
The gross yield takes a year of rent and divides it by the price of the apartment. It deducts nothing. It's the one that usually appears in listings and brochures, because it gives the highest number.
The net yield takes what's left after paying the property's expenses, and only then divides it by the price. It's what actually reaches your pocket. It's the only one that's useful for deciding.
An example with Asunción numbers
A 50 m² apartment (about 540 sq ft) costs USD 95,000, around USD 1,900 per m², close to the city's median price. It rents unfurnished for USD 650 a month, in line with what's being asked in Asunción today.
So far, 8.2%. Now let's look at what has to come off.
What you deduct to get to the net yield
- Property taxPaid once a year to the municipality, on the property's fiscal value, not its market price. In the example we estimate USD 300 a year.
- Building fees (expensas)Doorman, cleaning, elevators, common areas and reserve fund. In a new building in Asunción they run around USD 1.5 per m² per month: USD 75 a month, USD 900 a year.
- Real estate agent's commissionIn Paraguay it's customary to pay the equivalent of one month's rent to the agent who places the apartment, split 50/50 between tenant and owner. Your share is half a month, USD 325, paid only once each time a new tenant moves in. To stay on the prudent side, the example assumes the tenant changes every year.
- VAT on the rent invoiceRenting a property used exclusively as housing carries 5% VAT. If the USD 650 includes VAT, USD 371 a year goes to the tax authority, not to you.
| Item | USD per year |
|---|---|
| Rent collected (650 × 12) | 7,800 |
| Property tax (estimate) | −300 |
| Building fees (50 m² × 1.5 × 12) | −900 |
| Agent's commission (half a month, one new tenant per year) | −325 |
| VAT 5% (7,800 ÷ 21) | −371 |
| Net result before income tax | 5,904 |
What the listing says
10%
Hard to sustain once you do the full math
Gross yield
8.2%
7,800 ÷ 95,000
Net yield
6.2%
5,904 ÷ 95,000
The same apartment goes from 8.2% to 6.2%. Almost a quarter of what you collect goes to expenses. For a well-bought apartment in Asunción, a net yield between 5% and 6% a year is a reasonable result, and 6% is already a good number.
What about income tax?
We left it out on purpose. The net yield is calculated before the owner's income tax, which is how it's measured everywhere in the world: the international standard subtracts the property's own expenses, including property tax, but not the personal taxes of whoever buys it.
The reason is that this tax depends on each person, not on the apartment: on the regime you choose to file under, on your other income and on where you are a tax resident. Measuring before taxes lets you compare one apartment with another, and with other investments, on equal terms.
In Paraguay, rental income pays personal income tax (IRP) at 8%. The law lets you calculate it on half the rent, which works out to about 4% of what you collect. Foreign owners who are not tax residents are taxed under a different regime. Either way, that calculation is worth doing with your accountant, for your specific case.
And the 10% in the listings?
For this same USD 95,000 apartment to earn 10% net, it would have to rent for about USD 980 a month. That's 50% above what's paid in Asunción today for an apartment like this.
When you see a 10%, ask three things: whether it's gross or net, what rent it's calculated with, and whether that rent is furnished or unfurnished.
Choosing well is what makes the number hold
A 6.2% net holds when the apartment is occupied all year. And that doesn't depend on luck: it depends on the choice. Location, size, layout, the quality of the building and a rent in line with the neighborhood are what make an apartment rent quickly and make the tenant want to stay.
That's why the most important decision isn't made when the tenant shows up, but when you choose what to buy.
What we haven't counted yet: appreciation
So far we've only measured what the apartment pays you every month. But there's a second gain that doesn't show up in the rent math: the value of the apartment also changes over time. That's appreciation.
This is how the price per m² moved in Asunción's most valued neighborhoods over the past nine years, the period for which comparable data exists:
USD per m², asking prices. 2017: properties for sale; 2026: apartments for sale.
Each year, on average, the value per square meter in these neighborhoods rose between 2% and 3% in US dollars. It doesn't arrive all at once and you don't collect it every month, but it stays with you year after year while you own the apartment. Appreciation is strongest where location is scarce: in established neighborhoods, land is what gains the most value over time.
The full picture
If we add both gains, the rent and the property's value, only then do we see what the investment earns:
That's the number worth looking at: between 8% and 9% a year on a well-chosen apartment in Asunción's best neighborhoods. It doesn't come from inflating the rent, but from adding up the two gains a property has.
The return that matters is the one you collect, plus what your apartment is worth over the years.
In short
- The gross yield is the one in the listing. The net yield is the one you collect.
- To get to the net: property tax, building fees, the agent's commission and the VAT on the invoice.
- A 10% net is very hard to get in Asunción; 5–6% net is a good result.
- The net yield is measured before income tax, which depends on each person.
- Add appreciation (2–3% a year in the best neighborhoods) and you have the full picture: 8–9% a year.
That's what we're here for
Choosing an apartment is one of the most important decisions you'll make, whether it's your home or your investment. We come from real estate development and construction, and we work with market data for each neighborhood. We guide you so you can compare with clear criteria, not under pressure, and we speak English.
Want to know the net yield of a specific unit?
Message us on WhatsAppSources and assumptions. Price and rent in the example: typical values for apartments in Asunción according to MasterPlan Investments' market analysis (October 2026); the apartment is illustrative. Personal income tax on rent: 8% rate on a 50% base of the rent, Law No. 6380/19 (art. 59 and 60), DNIT IRP-RGC guide. 5% VAT on housing-only rentals: Law No. 6380/19. Property tax: taxable base = fiscal valuation (Law No. 125/91, art. 60, amended by Law No. 5513); estimated amount. Appreciation: price per m² 2017, InfoCasas Big Data; 2026, median of apartments for sale; asking prices, order of magnitude; past appreciation does not guarantee future results. Your tax situation may differ: confirm it with your accountant.