Property / Investing
Rental Yield Calculator: Gross and Net Yield
Work out the gross and net rental yield of a buy-to-let property, entering vacancy, management fees, property tax, insurance, maintenance, service charges, and other costs one by one, with buying costs added to the price.
Rental Yield Calculator: Gross and Net Yield: Gross yield is a year's rent ÷ the price: 36,000 on 400,000 is 9%. Net yield takes off vacancy and every running cost, 12,600 in this example, and divides by the price plus 12,000 of buying costs: 23,400 ÷ 412,000 = 5.68%. Runs 100% locally in your browser with zero server file uploads.
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| Cost | Per year |
|---|---|
| Vacancy | 1,800 |
| Property tax per year | 4,800 |
| Insurance per year | 1,500 |
| Maintenance and repairs per year | 2,500 |
| Service charge, ground rent, or HOA per year | 2,000 |
Gross yield is a year's rent ÷ the price, the figure most listings quote. Net yield takes off vacancy and every running cost, and divides by what the property really cost you, price plus buying fees and taxes. Mortgage interest is left out, so the yield compares properties regardless of how they are financed; for the return on your own cash with a mortgage, use the cash-on-cash calculator.
Gross yield in listings
Agents usually quote gross yields, which flatter a property: two flats with the same gross yield can differ by several points net if one has a large service charge or needs frequent repairs.
Yield and cap rate
Net yield on the price alone, without buying costs, is the same as the cap rate, the term used for commercial property.
How to use it
- Enter the price, the buying costs, and the monthly rent.
- Fill in vacancy, management, and each yearly cost.
- Read the gross and net yield and the breakdown of costs.
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Frequently asked questions
What is a good rental yield?
Many investors look for a gross yield of 5 to 8%; yields are lower in expensive cities, where buyers count on prices rising, and higher where property is cheap.
Why is the net yield so much lower?
Running costs often take 25 to 40% of the rent, and buying costs raise the amount invested, so the net yield is usually several points below the gross.
Is a mortgage included?
No: yield is worked out as if the property were bought with cash. For the return on your own money with a loan, use the cash-on-cash calculator.
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