Rental Yield Calculator
Calculate the gross and net rental yield on a buy-to-let property. Enter the property value, monthly rent, and annual running costs.
How Rental Yield Calculator works
Gross rental yield
Gross yield = (Annual Rent ÷ Property Value) × 100. This is the simplest measure — it ignores costs. Example: £14,400 annual rent on a £250,000 property = 5.76% gross yield.
Net rental yield
Net yield = ((Annual Rent − Annual Costs) ÷ Property Value) × 100. Annual costs include: letting agent fees (8–15% of rent), maintenance and repairs, landlord insurance, gas safety and electrical certificates, and void periods. Mortgage interest is typically excluded from yield calculations.
What is a good rental yield?
Average UK gross yields range from 3–4% in prime London areas to 6–9% in northern cities (Manchester, Liverpool, Leeds, Newcastle). A net yield of 4–6% after costs is generally considered attractive for buy-to-let in the current market.
Yield vs capital growth
Buy-to-let returns combine yield (rental income) and capital growth (property appreciation). High-yield areas often have lower capital growth; prime areas often offer lower yield but stronger capital appreciation. Total return is the sum of both.
Frequently asked questions
What is a good rental yield in the UK?
A gross yield of 5–8% is generally considered good in the UK. London typically yields 3–4% gross. Northern cities (Manchester, Liverpool) often achieve 6–9%. Net yield (after costs) is typically 1–2% below gross.
How do I calculate rental yield?
Gross yield = (Monthly Rent × 12) ÷ Property Value × 100. For a £1,200/month rent on a £250,000 property: (£14,400 ÷ £250,000) × 100 = 5.76%.
Does rental yield include mortgage payments?
No. Rental yield is calculated on property value, not equity. Mortgage payments affect your cash flow but are not deducted from yield calculations. Use rental yield to compare properties; use cash-on-cash return to measure your return on the deposit invested.
What costs should I include in net yield?
Letting agent fees, maintenance allowance (1–2% of property value per year), landlord insurance, service charges (flats), gas/electrical certificates, and an allowance for void periods (typically 4–6 weeks per year).
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