Rental Yield Calculator
Calculate gross and net rental yield on an investment property.
About the Rental Yield Calculator
Enter the purchase price including buying costs, the monthly rent, yearly running costs and a vacancy allowance. The calculator gives the gross yield, the net yield and the net yearly income.
Gross yield is yearly rent divided by the property price; net yield subtracts vacancy and running costs. Yields don't include mortgage costs or price growth, so use cash-on-cash return to judge a financed purchase.
The formula
Gross = rent × 12 ÷ price; net = (rent × 12 × (1 − vacancy) − costs) ÷ price
Worked example
A 300,000 property renting for 1,800 a month, 4,500 of yearly costs, 5% vacancy
- Gross: 21,600 ÷ 300,000 = 7.2%
- Net income: 21,600 × 0.95 − 4,500 = 16,020
- Net yield: 5.34%
Questions people ask
What's a good yield?
It varies by market; higher yields often come with higher risk or slower growth.
Should I include buying costs?
Yes, for a fair comparison include stamp duty or closing costs in the price.
Yield or cap rate?
Net yield and cap rate are close cousins; cap rate is usually based on the property's value rather than what you paid.