Rental Yield Calculator

Work out the gross and net yield on a rental property, factor in void periods and running costs, and see what your investment really returns.

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Letting fees, insurance, repairs, ground rent, service charge.
Share of the year the property sits empty. 5% is roughly three weeks.
Stamp duty, legal fees, survey, refurbishment. Included in the cash you've tied up.
Most buy-to-let lenders want at least 25%.
Interest-only is assumed, as most buy-to-let mortgages are.
Estimate only. Yields are shown before tax - use the Rental Income Tax Calculator for what you'd actually keep. Interest-only repayment is assumed, capital growth is excluded, and running costs are only as accurate as the figure you enter. Not financial advice.

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Calculating rental yield

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Estimating a property's performance

Before you buy, work out the yield to judge whether the deal stacks up. You need the purchase price, the expected rent, an estimate of running costs and a realistic vacancy rate.

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Understanding an existing property's performance

Keep an eye on yield across a property you already own so you know your investment is still returning what it should - and can act if costs have crept up.

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Why should you use our rental yield calculator?

  • Gross and net yield side by side, so you can see what costs really do
  • Factors in void periods rather than assuming 100% occupancy
  • Adds cash-on-cash return if you're buying with a buy-to-let mortgage
  • Shows how long it takes to pay back the cash you put in
  • Free, fast and no sign-up

FAQs

What is rental yield?

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Rental yield is a measurement investors use to understand an income-generating asset's performance over the course of a year. It measures how much cash your investment produces as a percentage of the asset's value. In property, that means the rental income as a percentage of the property's value.

There are two terms worth knowing: gross yield and net yield.

What is gross rental yield and how do you calculate it?

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Gross yield is the return on your investment before expenses and vacancies are taken into account, and it ignores mortgage interest. It's a common first metric because it's simple to calculate and lets you compare properties quickly.

To work it out, take the annual rental income, divide by the property value, then multiply by 100. On a £600,000 property let at £3,000 a month: £36,000 ÷ £600,000 × 100 = 6% gross yield.

What is net rental yield and how do you calculate it?

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Net yield takes account of expenses and other outgoings such as maintenance, mortgage interest and insurance. It's sometimes called a rate of return. Because it includes those costs it gives a far more accurate picture of an investment's cash flow than gross yield.

To work it out, take the annual rental income, subtract annual expenses, divide by the property value, then multiply by 100. On a £600,000 property let at £3,000 a month with £6,000 of annual costs: (£36,000 - £6,000) ÷ £600,000 × 100 = 5% net yield.

What is a good rental yield?

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There's no single right answer - it depends on the area, the property type and your strategy. Higher-yielding areas often come with lower capital growth, and vice versa. What matters more is that the property is cash flow positive after all costs, including void periods and surprise repairs, and that it stays that way if interest rates move.

What is cash-on-cash return and how does it differ from yield?

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Cash-on-cash return measures the annual profit against the cash you actually put in - your deposit plus purchase costs - rather than against the full property value. On a mortgaged buy-to-let it is usually the more useful number, because leverage means the cash you tied up is much smaller than the price of the property.