Rental Yield Calculator

Use this rental yield calculator to work out the gross and net yield on an investment property, plus net annual income after running costs.

What it does

The Rental Yield Calculator shows how much annual income an investment property produces as a percentage of its value. It reports the gross yield, the net yield after running costs, and the net annual income.

Data sources & parameters

This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

The formula

gross_yield = annual_rent ÷ property_value × 100; net_yield = (annual_rent − annual_costs) ÷ property_value × 100

How it works

Gross yield divides the annual rent by the property value. Net yield first subtracts annual running costs from the rent, then divides the remaining income by the property value, so you see the return before and after expenses.

Where it is used

Comparing the return of different rental properties
Checking whether a property's rent justifies its price
Seeing how running costs erode the headline yield

Worked example

A property worth $400,000.00 rents for $24,000.00 a year with $4,000.00 of running costs. That is a gross yield of … and a net yield of …, leaving … of net annual income.

What the rental yield calculator does

The rental yield calculator shows how much income an investment property generates as a percentage of its value. From the annual rent, the property value, and your yearly running costs, it works out two yield percentages and a net income figure, so you can judge whether a property is priced fairly for the rent it commands.

Because yield is a percentage, a small flat and a large house can be compared directly, and you can weigh a property against other locations and other kinds of investment.

How rental yield is calculated

Gross yield divides the annual rent by the property value and multiplies by one hundred. A property worth 400,000 that rents for 24,000 a year has a gross yield of six percent. It is quick and widely quoted, but it ignores every cost of ownership.

Net yield subtracts your annual running costs from the rent to find the net income, then divides that by the property value. With 4,000 of yearly costs, the same property has net income of 20,000 and a net yield of five percent. The gap between gross and net, one percentage point here, is the cost of owning and running the property, and beginners often overlook it.

Gross versus net

Most listings quote gross yield, but two properties with the same gross yield can deliver very different net returns. An older building with high maintenance, an apartment with heavy service charges, or a let that needs full management will have a wider gap between gross and net than a newer, low-maintenance home you manage yourself.

Base decisions on net yield and be realistic about the costs each property carries. A property with a slightly lower gross yield but far lower running costs can be the better investment.

Which costs to include

Management and letting fees, if you use an agent to find tenants and handle the tenancy.
Insurance for the building and, where relevant, landlord liability.
Maintenance and repairs, budgeted as a yearly average, not an unusually good year.
Service charges or body corporate fees for apartments and managed estates.
Property taxes and local charges that fall on the owner.
A vacancy allowance for the weeks between tenancies when no rent comes in.

Leave out mortgage principal repayments, which move money into equity instead of being a cost. You can include mortgage interest for a picture of the return after financing, but the classic net yield is calculated before any borrowing so the property can be judged on its own.

How to use the calculator

Enter the annual rent the property produces, or is expected to produce.
Enter the property value, usually the purchase price or a current valuation.
Enter your total yearly running costs.

The calculator shows the gross yield, the net yield, and the net annual income. Raise the cost figure to a more cautious estimate and watch the net yield fall, or lower the price you are willing to pay and see how much the yield improves.

Reading the result in context

A five percent net yield is attractive when safe savings pay little and unremarkable when they pay a great deal. Interest rates, local rents, and property prices all move, so test a yield against current borrowing costs and comparable investments.

High-yield areas often come with slower price growth or higher tenant turnover, while prime locations may offer thin yields but steadier capital appreciation. Yield covers only the income side of the return and says nothing about how the property's value might change. Weigh it against the prospects for growth, the reliability of the rent, and the effort of managing the let.

Run several candidate properties through the calculator using net yield and realistic costs to build a shortlist, then look at what yield cannot measure: local rental demand, the condition of the building, the likelihood of long void periods, and your own appetite for management.

This article is general information only and is not financial advice.

About This Rental Yield Calculator

Use this rental yield calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.

Frequently asked questions

How does the rental yield calculator work?

Enter the annual rent, the property value, and your yearly running costs. The calculator divides the rent by the value to give the gross yield, subtracts your costs to find net income, and divides that by the value to give the net yield. All three results update as you change any figure.

What is a good rental yield?

There is no single right number because it depends on the location, property type, and interest rates at the time. Many investors look for a gross yield somewhere between five and eight percent, but a lower yield can still make sense in an area with strong price growth, while a high yield may signal higher risk or heavier costs.

What is the difference between gross and net yield?

Gross yield uses the full annual rent and ignores expenses, so it is a quick headline figure. Net yield subtracts running costs such as management fees, insurance, maintenance, and taxes before dividing by the value. Net yield is the more accurate measure of what the property returns.

Which costs should I include in running costs?

Include recurring expenses you pay to keep the property let: management or letting fees, insurance, maintenance and repairs, service charges, property taxes, and any vacancy allowance. Do not include the mortgage principal, since that is repayment of a loan, not a running cost, though you can include mortgage interest if you want an after-financing view.

Does rental yield account for the mortgage?

The basic yield figures do not, because yield measures the property's return against its value, not against your cash invested. To see the return on the money you actually put in, look at cash-on-cash return instead, which compares annual cash flow to your deposit and buying costs.

Is my data kept private?

Yes. The calculation runs entirely in your browser. Nothing you enter is uploaded, stored, or shared with anyone.

About the author

Written and reviewed by

Taha Kheirandish

Economics student and independent researcher

Taha Kheirandish reads tax codes the way other people read maps — to find out where a system actually leads, not where it claims to go.

He is an economics student, and his work here is comparative by design. A pension deferral bonus in Quebec, a commuting allowance in Germany, a rent-increase ceiling in the Netherlands: each is a decision a government made about how money should move, and each reads differently once you set it beside eight others. He builds and checks these calculators across nine markets from primary sources — the regulation rather than a summary of it, the ministry’s own circular rather than a news item quoting it.

That is the editorial standard of the site as well as his habit. Every rate, threshold and bracket here carries the document it was read from and the date it takes effect, and gets re-checked when the law moves rather than when someone happens to notice.

He is a researcher, not a licensed adviser, and nothing on this site is personal financial advice. It is arithmetic done carefully with its sources shown — so that you can check it, and take it to someone who is.

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