For a decade, cheap money made every purchase look clever. In 2026 the arithmetic is stricter: eurozone five-year fixes sit around 3.2–3.6%, UK five-year money above 4%, and US thirty-year rates still north of 6%. Whether a rental purchase works now depends on a spread you have to calculate honestly.

Start with gross yield — annual rent over price — but never stop there. Take our Madrid listing as the worked case: €2,400 a month is €28,800 a year. A comparable Salamanca flat costs about €820,000 to buy, so gross yield is 3.5%. Now subtract what the brochure ignores: community fees and building maintenance (€3,600), IBI property tax (€900), insurance (€400), a maintenance reserve of around 0.5% of value (€4,100), and one month of void every two years (€1,200 annualised). Net rent is roughly €18,600 — a 2.3% net yield. Against a 3.1% Spanish fixed-rate mortgage, that is negative leverage: every borrowed euro costs more than it earns, and the purchase only works as a bet on Salamanca capital values.

Run the same math in Dubai and the sign flips. Business Bay one-beds gross around 6.5–7%; service charges and management are heavier — call it 1.5 to 2 points — leaving roughly 5% net against mortgage rates near 4.5%. Thin, but positive, before any appreciation. London sits in between: an Islington two-bed at £3,200 a month against a £900,000 valuation grosses 4.3%; after voids, agent fees and maintenance, call it 3.3% net versus 4.3% five-year fixes. Negative on leverage — which is why so much prime London stock is held unmortgaged.

Three rules fall out of this. First, compute net-net: net rent against total acquisition cost including purchase taxes, which range from 4% in Dubai to roughly 12% in Barcelona. Second, stress the rate: if the deal cannot survive a refinance 150 basis points higher, you are running a duration bet, not an income asset. Third, remember that negative leverage is a choice, not a sin — buyers accept it deliberately in markets with strong rent growth, currency motives or scarce trophy stock. What is unforgivable is not knowing you are making that choice.

Rates will move; the method will not. A property that clears its financing cost on honest numbers pays you to wait. One that does not is a growth stock with a boiler — own it only if you mean to.