Rental Yield Calculator

Rental yield is a measure of how much income a property generates relative to its value or purchase price, expressed as a percentage. It helps investors compare the return potential of different properties. There are two types: gross yield (before expenses) and net yield (after expenses).

Gross rental yield is calculated using your total annual rent divided by the property price, without deducting any costs. Net rental yield accounts for annual expenses such as maintenance, insurance, management fees, and vacancy — giving a more realistic picture of your actual return.

A rental yield of 5–8% is generally considered good in most markets, though this varies by location. High-demand urban areas may see lower yields (3–4%) due to high property prices, while regional areas may offer higher yields. Always consider capital growth potential alongside yield.

Vacancy rate represents the percentage of time your property sits empty without generating income. Even a 5% vacancy rate reduces your effective annual income noticeably. Factoring it in gives you a more accurate view of your net returns and helps you stress-test your investment.

Calculating rental yield before purchasing helps you determine whether a property is a sound investment compared to alternatives. It allows you to estimate cashflow, compare properties in different locations, and decide if the return justifies the purchase price and associated costs.

Annual expenses typically include property management fees, maintenance and repairs, council rates, building and landlord insurance, body corporate or strata fees, water rates, and any other recurring ownership costs. Mortgage repayments are sometimes included depending on whether you want a cash-on-cash return.

The payback period is the number of years it would take for the net rental income to fully recover the original purchase price of the property. A lower payback period means faster cost recovery. It's a useful metric for comparing investment efficiency across different properties.

Yes — the Rental Yield Calculator works for any currency and any market. Simply enter your local property price and rental figures. The formulas for gross yield, net yield, and payback period are universal and apply equally to UK, Australian, or any other real estate market.