Rental Yield Calculator
Calculate rental yield on investment properties.
Last updated: March 2026
Gross Yield
5.8%
Net Yield
4.6%
Annual Profit
£$11,400
Monthly Cash Flow
£$950.00
How You Compare
Your gross rental yield is better than 54% of UK rental properties.
Industry typical: 3.5-7%
Source: Zoopla Rental Market Report 2025
💡 What This Means
- ✅ 5.8% gross yield is solid and near the UK average. Higher yields are typically found in the North, lower yields in London/South East.
- 💰 Monthly cash flow of £950. Remember to set aside 10-15% of rent for maintenance and void periods.
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What is Rental Yield?
Rental yield is the annual return a property generates from rent as a percentage of its purchase price or current value. Gross yield uses rental income only, while net yield deducts all landlord expenses. It is the primary metric for buy-to-let investment analysis and portfolio comparison. Estimate your mortgage costs with the Mortgage Calculator and purchase tax with the Stamp Duty Calculator.
The Formula
Gross Yield = (Annual Rental Income ÷ Property Value) × 100 Net Yield = ((Annual Rental Income − Annual Costs) ÷ Property Value) × 100
Annual costs include mortgage interest, management fees, insurance, maintenance, void periods, and letting agent fees.
Worked Example
A £200,000 property rents for £950/month with annual costs of £4,200.
- Annual rental income = £950 × 12 = £11,400
- Gross yield = (£11,400 ÷ £200,000) × 100 = 5.7%
- Net income = £11,400 − £4,200 = £7,200
- Net yield = (£7,200 ÷ £200,000) × 100 = 3.6%
📌 Gross yield of 5.7% and net yield of 3.6%. The 2.1% gap between gross and net highlights the importance of accounting for costs when evaluating investment properties.
Why This Matters
Investment comparison
Rental yield lets you compare property returns directly with stocks, bonds, and savings accounts. A 5% net rental yield competes well with most fixed-income investments, plus you benefit from capital appreciation.
Portfolio decisions
Comparing yields across your portfolio identifies underperformers. A property yielding 3% in a rising-value area may be worth holding for capital growth, while a 7% yielder in a static market is a pure income play.
Common Mistakes
❌ Using gross yield for decisions
Gross yield of 8% sounds excellent, but if costs eat 40% of income, your net yield is only 4.8%. Always calculate net yield — it's the number that hits your bank account.
❌ Ignoring void periods
Budget 4-8 weeks of void (empty property) per year. A 6-week void reduces annual income by 11.5%. Tenant turnover also incurs re-letting fees (typically 50-100% of one month's rent).
Industry Benchmarks
| Category | Good | Average | Poor |
|---|---|---|---|
| London | 5%+ | 3-5% | Below 3% |
| North England | 8%+ | 5-8% | Below 5% |
| UK average | 6%+ | 4-6% | Below 4% |
Related Tools
Mortgage Calculator
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Use free →Real EstateStamp Duty Calculator
Calculate UK stamp duty land tax on property purchases. See rates for first-time buyers, additional properties, and the total tax due on your purchase price.
Use free →Real EstateHome Affordability Calculator
Estimate how much home you can afford based on your income, deposit, debts, and monthly expenses. See your maximum property price and mortgage amount.
Use free →Real EstateBuy vs Rent Calculator
Compare costs of buying vs renting a home.
Use free →Frequently Asked Questions
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