For a long time home prices have been rising in Vienna. Result: gross rental yields - the return on investment on a property before all expenses - are no longer good. However, it all depends where you buy.

The basic rule is that yields are higher in less expensive districts

So yields are at their lowest in District 1 (Innere Stadt). Innere Stadt is Vienna´s most luxurious and least populated district, with roughly 17,000 inhabitants. But with a workforce of around 100,000, it is Vienna´s largest employment locale.

Apartments in Innere Stadt change hands at around EUR 11,000 to EUR 13,000 per sq. m., whereas in the other areas apartments cost around only EUR 3,500 to EUR 7,800 per sq. m. Yields in Innere Stadt range from 1.7-2.3% At this kind of yield, no-one is buying an apartment to rent it out. These are the residences of the rich.

But acceptable yields can be had in districts such as Margereten, Mariahilfen, Favoriten, Hernals, or Leopoldstadt, where apartment costs vary enormously from EUR 3,500 to EUR 5,400 per sq. m.. In these districts, yields range from nearly 5% for very small apartments, to 3-4.4% for large apartments.

So one should choose one´s district and size carefully. Since a large apartment is less trouble to manage than a couple of smaller ones, a largish apartment in Favoriten with a yield of 4.3% has attractions, for example.

Outside Vienna, Salzburg apartments tend to cost around EUR 5,300 to EUR 6,300 per sq. m. Rents on Salzburg apartments are close to Viennese levels, at around from EUR 12-17 per sq. m. per month. Salzburg gross rental yields range from 2.4% to 3.8%.

Apartments are most affordable in Graz, where apartments cost, on average, EUR 3,300 to EUR 4,400 per sq. m. In Graz, rents range from EUR 10.00 to EUR 13.50 per sq. m. per month. Gross rental yields in Graz are slightly better than in Salzburg - ranging from 2.5% to 4.9%. The smallest apartments return the highest rental yields.