Rental Yield Calculator
Calculate gross and net rental yield on an investment property to compare returns across different properties.
How to use this tool
- Enter annual rental income, property purchase price and annual running expenses in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your gross rental yield and the full breakdown beneath it.
Rental yield lets you compare investment properties apples-to-apples. Always compare net yield after expenses, not just gross yield from headline rent.
Formula
Gross Rental Yield (%) = Annual Rental Income ÷ Property Price × 100
Annual Net Income ($) = Annual Rental Income − Annual Running Expenses
Net Rental Yield (%) = Annual Net Income ÷ Property Price × 100
How it works
This calculator computes two complementary yield figures: gross yield (income before costs as a percentage of purchase price) provides a quick market-comparison metric, while net yield deducts running expenses to show the income yield after the cost of ownership.
Neither figure accounts for mortgage financing, capital growth, or purchase costs such as stamp duty and legal fees; for a financing-adjusted return, use a cash-on-cash return calculator instead. Yield comparisons are most reliable when expenses are estimated consistently across properties.
Worked example
Worked example
- Annual rental income: $18,000; property purchase price: $250,000; annual expenses: $4,500.
- Gross yield = $18,000 ÷ $250,000 × 100 = 7.2%.
- Annual net income = $18,000 − $4,500 = $13,500.
- Net yield = $13,500 ÷ $250,000 × 100 = 5.4%.
Gross Rental Yield = 7.2%; Net Rental Yield = 5.4%; Annual net income = $13,500
Key terms
- Gross rental yield
- Annual rent divided by property purchase price, expressed as a percentage; a quick benchmark that ignores running costs and financing.
- Net rental yield
- Annual rent minus all operating expenses, divided by property price; a more realistic measure of the income return after ownership costs.
- Running expenses
- Recurring annual costs of holding a rental property: rates, insurance, property management fees, maintenance, and landlord-paid utilities.
- Capital growth
- The increase in a property's market value over time; not captured by yield calculations but a major component of total property investment return.
- Yield spread
- The difference between gross and net yield; a wide spread signals high operating costs relative to rental income.
Frequently asked questions
- What is the difference between gross and net rental yield?
- Gross yield = annual rent / property price × 100. Net yield deducts operating expenses before dividing by price. Net yield is a more accurate measure of actual return.
- What rental yield should I target?
- A net yield of 5–8% is generally considered solid for residential rentals. Below 4% may be hard to cash-flow positively. Higher yields often come with higher risk or lower-quality tenants.