Rental Yield Calculator
Rental Yield Calculator: Gross and Net
Enter the price and weekly rent to see the gross rental yield. Add costs and vacant weeks for the net yield, or a target yield to see the rent it would take.
Your property
Price and rent give the gross yield. The other fields are optional.
Enter the price and weekly rent to see the rental yield.
Results are estimates only, based on the figures you enter, and are before tax. They aren’t a valuation, a rent appraisal, a quote, an approval or tax or financial advice, and they don’t consider your objectives, financial situation or needs.
How it works
How to calculate rental yield.
Gross rental yield
Weekly rent × 52 ÷ property price × 100.
For example, a $600,000 property renting for $550 a week: $550 × 52 = $28,600 a year. $28,600 ÷ $600,000 × 100 = a gross yield of about 4.8%.
Net rental yield
Take the yearly rent after vacant weeks, subtract running costs such as management, council rates, water, strata, insurance and repairs, then divide by the price and multiply by 100.
Using the same property with two vacant weeks, a 7% management fee and $5,000 of other yearly costs: rent after vacancy is $27,500, management is about $1,925, so net rent is about $20,575. $20,575 ÷ $600,000 × 100 = a net yield of about 3.4%.
An illustration only, using made-up figures.
What is a good rental yield?
There’s no single answer. Yield is one part of the return. Costs, vacancies, the loan, tax and any change in the property’s value matter too. Moneysmart suggests looking for areas with high growth, higher rental yield and low vacancy rates, and warns that rental income may not cover your mortgage payments and other expenses. Net yield figures for similar properties in the same area are one way to compare, rather than a general rule of thumb.
From yield to cash flow
Yield doesn’t include the loan. To see what a property could cost or return each week after loan repayments, before tax, use the investment property calculator.
Questions
Common questions, straight answers.
How do you calculate rental yield?
Gross rental yield is the weekly rent × 52, divided by the property price, × 100. Net rental yield takes the yearly rent after vacant weeks, subtracts running costs such as management, rates, strata, insurance and repairs, then divides by the price and multiplies by 100.
What is a good rental yield?
There’s no single number. Yield is only part of an investment’s return: costs, vacancies, the loan, tax and any change in the property’s value matter too. Moneysmart suggests looking for areas with high growth, higher rental yield and low vacancy rates. Net yields of similar properties in the same area can be compared. Moneysmart also notes rental income may not cover your mortgage payments and other expenses.
What’s the difference between gross and net rental yield?
Gross yield uses the rent alone. Net yield allows for vacant weeks and running costs, so it’s lower and closer to what you actually receive.
Does rental yield include the mortgage?
No. Yield compares rent with the property’s price. Loan repayments are separate. Our investment property calculator shows cash flow after loan repayments, before tax.
Does the result include tax?
No. Results are before tax. Deductions and depreciation depend on your circumstances, so speak to a registered tax agent about the tax side.
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