Rental Yield Calculator

Rental yield is the foundational metric every landlord uses to judge whether a property earns its keep. The calculator takes three core inputs — the property's purchase price (or current market value), the annual rental income, and the ongoing annual costs — and outputs two distinct figures: gross yield and net yield. Gross yield gives you a quick headline comparison across properties, while net yield strips away the real-world expenses that erode your return, giving a far more honest picture of investment performance.

The distinction between gross and net yield matters enormously in practice. Gross yield simply divides annual rent by property value and multiplies by 100 — it's fast but flattering, because it ignores mortgage interest, letting agent fees (typically 8–15% of rent), landlord insurance, maintenance reserves, void periods, and property management costs. Net yield subtracts all of those annual costs from the rental income before dividing by the property price. A property showing a tempting 7% gross yield can easily fall to 4% net once a full cost stack is applied, fundamentally changing whether the deal makes sense.

Several factors have an outsized effect on the yield figure your calculator returns. Location is the most obvious — property prices vary far more between cities than rents do, which is why terraced houses in northern English cities or midwest US towns often yield 7–9% gross while prime London or Manhattan apartments struggle to exceed 3–4%. Property type, tenant demand, and local vacancy rates all feed into whether your assumed rent figure is achievable year-round. Investors should model a realistic void allowance (typically 4–8 weeks per year) as part of annual costs rather than assuming 52 weeks of paid rent, since even a single empty month can shave 0.5–1 percentage point off net yield.

A common mistake is anchoring the yield calculation to the original purchase price rather than current market value. If your property has appreciated substantially, recalculating yield on today's value — sometimes called 'yield on value' — gives a truer picture of the opportunity cost: could that capital earn more elsewhere? Conversely, investors analysing new acquisitions should always stress-test their numbers by running the calculator with a 10–15% lower rent assumption to ensure the deal still works if the market softens. Yield should never be viewed in isolation; pair it with cash-on-cash return (which accounts for leverage) and capital growth projections for a complete investment picture.