Rental Yield in Bulgaria: What an Apartment in Sofia Can Really Earn in 2026

Published on May 19, 2026 and written by Cyril Jarnias

Sofia is changing dimensions for investors. As a new eurozone member and the capital of a country where real estate surged by nearly 15% per year in 2024‑2025, the city now combines scarce quality supply, rising rents, and relatively mild taxation. But after two years of speculative fever, the market is entering a more rational cycle. The real question for an investor in 2026 is no longer “is it going up?” but “how much does an apartment in Sofia actually yield, once all fees and taxes are paid?”.

A Bulgarian Market Still Rising, but Less “Overheated”

To properly understand rental yield in Sofia, you first need to consider the Bulgarian context. Since 2024, the country has been among the European champions of price increases: official indices show an annual rise of around 15% in 2024‑2025, peaking at +15.51% in the second quarter of 2025 on the national residential index.

This acceleration is driven by several compounding factors: economic growth of around 3% per year, very low unemployment, real wages rising 8‑12% annually, an expanding urban middle class, and cheap mortgage credit, with new loans granted at around 2.5‑2.8% in 2025 and expected around 3‑3.5% in 2026.

At the same time, the country joined the eurozone on January 1, 2026. The lev was already pegged to the euro (1 EUR = 1.95583 BGN), so no exchange rate shock, but this integration changes the perception of risk: no currency risk for eurozone savers, better comparability with Athens or Bucharest, and a political signal of stability. The European Central Bank also lowered the mandatory reserve ratio from 12% to 1%, freeing up nearly 16 billion leva (8.2 billion euros) in liquidity. Banks therefore have more ammunition to finance households and businesses, including real estate.

In other words, the explosive phase is behind us, but growth remains on the table. For a buy‑to‑let investor, this means yield depends not only on annual rent but also on likely capital appreciation, even if more moderate.

Sofia in Numbers: How Much Does an Apartment Earn by Size and Neighborhood?

Yield data available for 2025, projected into 2026, give a fairly clear picture of the residential rental market in Sofia. The average gross yield in the capital is around 4.19%, across a mix of property types and neighborhoods. In practice, gross yields observed in Sofia generally range between 4% and 7% depending on the type of property and location.

Overall Yield Snapshot in Sofia

A city‑wide “all zones” summary highlights the following orders of magnitude:

Two trends are immediately apparent: small units (studio, 1‑bedroom) offer a higher yield than 2‑bedrooms and are often comparable to, or slightly below, 3‑bedrooms. This aligns with the national trend: studios and small apartments typically deliver 5.2‑6.4% gross yield per square meter, with an optimum around 35‑55 m², while larger family apartments and houses fall between 3% and 4.5%.

Neighborhood Focus: Center, Vitosha, Manastirski Livadi, Studentski Grad

Behind the average of 4.19% lies real heterogeneity across Sofia’s districts. Data from 2025‑2026 for four emblematic areas – Center, Manastirski Livadi, Vitosha, and Studentski Grad – illustrate this contrast well.

This table offers several useful takeaways for an investor in 2026.

In the center, gross yields range from just over 4% to just over 4.3%, despite high rents: 1‑bedrooms go for around €700 per month, 2‑bedrooms between €750 and €1,100, and 3‑bedrooms above €1,100. The rapid rise in purchase prices in historic districts has slightly compressed yields, but vacancy is low and demand is very deep.

Vitosha, another sought‑after southern suburb, even offers around 4.65% for a 1‑bedroom, with an entry price below €170,000 and rents at €650. Again, the 2‑bedroom, at €300,000 for €950 rent, peaks around 3.8%. This is a concrete illustration of a simple rule: the larger the surface area and budget, the more the gross rental yield tends to compress.

Finally, Studentski Grad, a student stronghold, shows an interesting profile: nearly 4.4% gross for a 1‑bedroom, slightly less for studios and 2‑bedrooms. This is an area with strong student and young professional demand, heavily dependent on the university and surrounding offices. The risk of vacancy is low, but the client base is more volatile than in established residential neighborhoods.

Gross Yield vs. Net Yield: What You Actually Keep

All these values are based on gross yield, calculated as:

Gross yield (%) = (monthly rent × 12 / purchase price) × 100

For a central apartment at €200,000 rented for €700 per month, this gives (700 × 12 / 200,000) × 100 = 4.2%.

However, this is not what the investor actually keeps each year. Between taxation, expenses, vacancy, and possible property management fees, the net yield typically falls by 1‑2 percentage points. Studies on the Bulgarian market estimate the typical gap between gross and net to be exactly in that range.

How Net Yield is Built in Sofia

Net yield takes into account:

Published estimates for Sofia converge: for a good downtown apartment, properly maintained and with low vacancy, realistic net yield falls between 3% and 4.5% per year. In practice, on a property showing 5% gross yield, you can expect around 3.5‑4% net. On a base of 4.2‑4.5% gross, the 3‑3.5% net range is more realistic.

A documented example illustrates this calculation. A 95 m² two‑bedroom in the Pirotska residence in Sofia is bought for BGN 450,000 and rented for BGN 2,000 per month, about €1,020. The annual gross revenue reaches BGN 24,000. After deducting…

Owner of a two‑bedroom in Sofia

– tax (9% of gross rent) for roughly BGN 2,160,

– property tax and waste fee (around BGN 400),

– repairs and furniture wear (indicative example BGN 1,500 per year),

– estimated vacancy of 5% of the time (BGN 1,200),

the net income comes out around BGN 18,740. Compared to the purchase price of BGN 450,000, this gives a net yield close to 4.2%, before considering any financing.

This example sits at the top end of the range, with a good‑quality property in a sought‑after neighborhood, limited vacancy, and optimized management. But it aligns well with the stated order of magnitude: in central Sofia, a net yield of 3‑4.5% is achievable in quality long‑term rentals.

Rents in 2026: Trends, Levels, and Tenant Profiles

Alongside purchase prices, the other key variable for investors is of course rent. And despite rapid price increases, rents in Sofia continue to rise. However, they remain competitive by European standards.

Rent Levels by Property Type

Available data for early 2026 gives the following orders of magnitude for the capital:

– Studio: about €430 per month on average, with a typical range between €340 and €560, depending on neighborhood, building condition, and proximity to the metro;

– 1‑bedroom: around €580 per month on average, typical range €450‑€760;

– 2‑bedroom: about €740 per month on average, frequent range €600‑€1,050;

– Average rent per m²: around €9.50/m² per month, with variations from €6 to €15/m² depending on the area.

In early 2026, rents rose about 5‑8% compared to January 2025, after already increasing 4‑6% in 2024. The expected progression for the whole of 2026, factoring in a slight slowdown, is around 4‑7%.

Which Neighborhoods Are Pushing Rents the Most?

The most expensive neighborhoods in terms of rent are:

– Lozenets, very popular with expats and executives, where a 1‑bedroom often rents for €700‑€900;

– Iztok, another upscale residential area, around €650‑€850 for a 1‑bedroom;

– Oborishte (near the Doctors’ Garden), with €600‑€800 for a 1‑bedroom.

Young professionals, especially those in IT and services, primarily target Lozenets, Hladilnika, and Krastova Vada. They typically pay €500‑€750 for a 1‑bedroom, €700‑€1,000 for a 2‑bedroom, depending on the property’s condition and metro proximity.

Families favor Ivan Vazov (near the large South Park), Vitosha, and Mladost, where 2‑ and 3‑bedrooms rent for between €700 and €1,100.

Some more peripheral areas, like Lyulin, Ovcha Kupel, Nadezhda, or Krasna Polyana, offer significantly lower rents but also lower prices per square meter. The gross yield there is often comparable to more upscale neighborhoods, but demand is shallower and vacancy potentially higher.

Rental Market Tension: Low Vacancy, Deep Market

The rental vacancy rate in Sofia is estimated at around 4% on average, indicating a fairly tight market. In the most attractive southern neighborhoods – Lozenets, Ivan Vazov – it even drops to between 2% and 3%. In these areas, a well‑positioned apartment typically rents within 2‑4 weeks; in less sought‑after zones or for dated properties, it can take 2‑3 months.

This tension explains why landlords often succeed in renegotiating rents upward at lease renewal without necessarily losing their tenants. This is especially true in areas like Mladost or Studentski Grad, where students and young employees cluster around new job hubs and metro extensions.

Long‑Term vs. Short‑Term: Two Yield Strategies

Rental yield in Sofia in 2026 is not limited to long‑term rentals. The city is also an active market for short‑term rentals like Airbnb, with a mix of urban tourists, business travelers, and digital nomads.

Long‑Term: Stability and Tax Simplicity

On the traditional segment (leases of several months or years), figures are fairly robust. In Bulgarian cities, most properties offer between 3.5% and 6.5% gross yield, with a national average around 4.3‑4.6%. In Sofia, it’s around 4‑6% gross for good locations, 4.19% on average according to a detailed database.

Once expenses are integrated, as we saw, net yields fall to between 3% and 4.5% for well‑located apartments. Taxation remains simple and relatively mild:

– 10% tax on rental income,

– applied to a base of 90% of gross rent (10% flat‑rate expense deduction),

– resulting in an effective rate of 9% of gross rent.

For an investor seeking to limit regulatory complexity and avoid day‑to‑day management, this long‑term model offers a good compromise between yield, visibility, and moderate risk.

Short‑Term: Higher Income, but Regulation Tightening

For short‑term rentals, Sofia is clearly a profitable market – but one undergoing regulatory normalization. Between February 2025 and January 2026, Airbnb‑style listings generated a median annual income of around €15,000, with a median occupancy rate of about 69% and an average nightly price of about €57.

However, starting May 20, 2026, an EU regulation on short‑term rentals will change the game significantly. Major platforms like Airbnb and Booking will be required to automatically transmit booking and overnight data for each registered property to authorities every month. Above all, each listing must be linked to a municipally verified registration number in real time: an illegal or non‑existent number will result in automatic deactivation of the listing, photos included.

For Sofia, this should have two effects:

– A reduction in effective short‑term supply, especially among small individual landlords unwilling to face the administrative complexity;

– A mechanical increase in nightly rates, by at least 15% according to analyses, to incorporate taxes and charges now paid by almost everyone.

Bulgarian tourism specialists also forecast a 25‑30% rise in vacation property prices over the next few years, partly driven by this European regulation and increased sector transparency.

For an investor willing to manage (or have managed) a property as a fully compliant short‑term rental, Sofia will likely remain interesting, especially in central areas and metro‑connected neighborhoods. But the “wild Airbnb” strategy that relied on regulatory gray areas is fading.

Financing, Taxation, and Entry Cost: A Market That Remains Accessible

One of Bulgaria’s strengths for a buy‑to‑let investor remains the combination of:

– prices per m² still low by European standards,

– relatively cheap mortgage credit,

– moderate and stable taxation.

Purchase Prices: Sofia Remains Cheap… Seen from Western Europe

At the start of 2026, nationally, the average residential property price is between €1,381 and €1,400/m², i.e., about €112,000 for a standard 80 m² apartment. Most urban transactions fall within a range of €1,000 to €1,800/m², with strong variations by city and neighborhood.

Sofia is by far the most expensive market in the country, but remains very competitive compared to other European capitals: around €2,400/m² on average, well below Athens, Belgrade, or Bucharest, which are themselves cheaper than major Western capitals. In practice, for a 45‑55 m² 1‑bedroom in a decent neighborhood, the entry ticket often hovers between €150,000 and €200,000. A 80‑100 m² 2‑bedroom in a desirable area can easily exceed €250,000 and approach €300,000, or even more in premium neighborhoods.

At the other end of the spectrum, rural regions or certain northwestern cities offer properties between €300 and €500/m², but these areas are more suited to low‑cost primary residences or sunny retirement projects than to high‑yield rental strategies.

Banking Conditions: Leverage Still Interesting

On the financing side, Bulgaria stands out for a regulated but rather favorable environment for responsible lending. The National Bank imposes a maximum LTV ratio of 85%, a debt‑to‑income cap of 50% of household income, and a maximum loan term of 30 years. Despite these safeguards, mortgage lending has grown strongly: +25% in 2024, +26.4% in the first nine months of 2025, for a total outstanding of about 27.6 billion leva (14.1 billion euros). As a sign of prudence, the non‑performing loan rate remains very low, around 1%.

In short, for a €100,000 property, a foreign buyer often needs to bring €30,000‑€40,000 in equity, plus transaction costs (5‑10% of the price) and possibly a renovation and furnishing budget. On a €200,000 apartment in Sofia, it is common for the all‑in bill (equity, fees, fit‑out) to exceed €75,000‑€80,000 even before moving in or renting it out.

Taxation: Simple, Readable, and Gentle

On the tax front, Bulgaria remains one of the most competitive environments in the European Union for a real estate investor.

For an individual who rents out an apartment long‑term:

– Rental income is taxed at 10% under personal income tax, after a flat‑rate 10% deduction for expenses, resulting in a net charge equivalent to 9% of gross rents;

– No social security contributions are due on this passive rental income;

– Property tax, based on a cadastral value usually 50‑70% below market value, is levied at a rate of 0.1‑0.45% of that base, plus a waste collection fee of 0.2‑1% of the same base;

– In Sofia, primary residences benefit from a 50% reduction on both property tax and waste fee.

Capital gains on property are taxed at 10%, with significant exemptions: sale of a primary residence held for more than three years, sale of up to two other properties held for more than five years, and exemption for inherited properties. Bulgarian companies are subject to a flat corporate income tax of 10%, one of the lowest in the EU.

Outlook 2026‑2031: Rental Yield and Potential Capital Gain

With this landscape drawn, what can an investor who buys an apartment in Sofia in 2026 to rent it out expect?

Medium‑term market studies mention a central scenario of cumulative price increase of about 45% over the 2026‑2031 period, and projections of possible doubling of values over ten years (2026‑2036), with scenarios ranging from +70% to +150% depending on the vigor of Bulgarian income convergence toward Western European levels.

At the same time, rents should continue to rise, although the dynamic cannot indefinitely keep pace with purchase prices. Projections for rent increases in Sofia in 2026 fall within the 4‑7% range, with the capital expected to outperform other Southeastern European markets where annual increases of around 3% are forecast.

Conversely, several areas should remain structurally solid in terms of value and rental demand:

– Sofia’s historic central districts,

– areas directly served by the metro (especially with Line 3 extensions),

– certain premium coastal sectors (Sunny Beach, Sveti Vlas, Nessebar, Burgas),

– and new energy‑efficient residential projects, better suited to future environmental standards.

Concretely: What Yield to Target on a 1‑Bedroom or 2‑Bedroom in Sofia in 2026?

By combining gross yield data by neighborhood, local taxation, and expected rent and price dynamics, we can sketch orders of magnitude for a typical investment.

Let’s take three representative profiles:

– A 45‑55 m² 1‑bedroom in a central or semi‑central neighborhood (Lozenets, Iztok, wider center);

– An 80‑90 m² 2‑bedroom in a rising neighborhood (Manastirski Livadi, Vitosha);

– A 1‑bedroom in Studentski Grad targeting student/young professional clientele.

Based on 2025‑2026 data:

For an investor willing to take on more active management, short‑term renting some of these properties can significantly boost gross yield – up to 6‑8% annually, or even more – but at the cost of higher regulatory and operational risk, especially after the EU platform regulation takes effect.

A Window of Opportunity Still Open, But More Demanding

In 2026, Sofia is no longer the “virgin and bargain” market of the 2010s, but it hasn’t reached the saturation level of major Western European capitals either. With an average price around €2,400/m², gross yields between 4% and 6% in long‑term rentals, a macroeconomic environment boosted by eurozone integration and strongly rising wages, the Bulgarian capital remains one of the rare European markets offering an attractive yield‑to‑risk ratio.

For those who accept these realities and now think in terms of 5‑10 years rather than speculative flips, a well‑chosen apartment in Sofia in 2026 can aim, year after year, for a net yield of around 3‑4.5% in long‑term rental, complemented by potential capital appreciation of between 6% and 10% per year in central scenarios. It’s no longer the early‑stage Eldorado, but on a European Union scale, it remains a difficult equation to match.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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