Rental Yield Calculator
Gross yield is not a return.
Work out Rental Yield. Gross yield is not a return. Names the misconception directly.
Net yield
4.37%
6% gross · costs take 21% of the rent
Gross yield is rent divided by price and it is not a return. It ignores voids, management, maintenance, insurance and every other cost of ownership — which is why an advertised 8% gross routinely nets out at 4% or less. Voids come off first and hurt most. Two empty weeks a year is a 3.8% cut to the rent before anything else is deducted, and in a soft market four to six weeks is common between tenancies. Purchase costs belong in the denominator. Stamp duty, legal fees and survey costs are capital you have committed to the investment, so a yield calculated against the purchase price alone overstates the return on what you actually spent.
How the Rental Yield Calculator works
Gross and net rental yield with voids, management, maintenance and purchase costs all counted. An advertised 8% gross routinely nets out at 4% or less once the real costs of letting are included.
Also known as: buy to let yield calculator · what yield should i expect · gross versus net rental yield · is this rental worth buying
Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.
Frequently asked questions
What is a good rental yield?
Net matters, not gross. Net yields of 4 to 6% are typical in stable markets; anything advertised well above that usually reflects higher risk, higher costs or a market where capital growth is not expected.
What is the difference between gross and net yield?
Gross is rent divided by price and ignores every cost of ownership. Net deducts voids, management, maintenance, insurance and service charges, and it is routinely half the gross figure.
How much should I allow for voids?
Two to four weeks a year is typical, more in a soft market or with short tenancies. Two empty weeks is a 3.8% cut to the rent before anything else is deducted.
Should purchase costs go in the calculation?
Yes, in the denominator. Stamp duty, legal and survey fees are capital committed to the investment, so a yield against the purchase price alone overstates the return on what you actually spent.
What costs do people forget?
Ground rent and service charges on leasehold, safety certificates, periodic redecoration, and the tenant-find fee that is separate from the management percentage.
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