What Is Rental Yield?
Rental yield measures the annual rental income a property generates as a percentage of its value. It is the key metric buy-to-let investors use to compare properties and judge whether an investment produces a worthwhile return. This calculator works in any currency — just enter consistent figures.
Gross vs Net Yield
Gross yield ignores costs and simply divides annual rent by the property price. Net yield subtracts running costs — management fees, insurance, maintenance, ground rent, void periods — giving a far more realistic picture of profitability. Gross yield is useful for quick comparisons; net yield is what actually lands in your pocket.
How to Use This Calculator
Enter the property purchase price, the monthly rent you charge (the tool multiplies by 12 for the annual figure), and your total estimated annual expenses. You instantly get gross yield, net yield, annual rent and net annual income.
Formula
$$\text{Gross Yield} = \frac{\text{Annual Rent}}{\text{Property Price}} \times 100$$
$$\text{Net Yield} = \frac{\text{Annual Rent} - \text{Expenses}}{\text{Property Price}} \times 100$$
Worked Example
A property costs 250,000 and rents for 1,200 per month, so annual rent is 14,400. Gross yield = \(14{,}400 \div 250{,}000 \times 100 = 5.76\%\). With 3,000 of annual expenses, net income is 11,400, so net yield = \(11{,}400 \div 250{,}000 \times 100 = 4.56\%\).
FAQ
What is a good rental yield? Many investors target 5–8% gross, but it varies widely by location and property type.
Does this include mortgage payments? No — yield is based on the cash price. Include mortgage interest in expenses if you want net yield on a financed property.
Should I use purchase price or current value? Use the value relevant to your decision: purchase price for return-on-cost, current market value for return-on-equity.
