Rental Yield Calculator
Calculate your rental yield to determine the potential return on your property investment.
Expense Breakdown
Gross Yield
Net Yield
Financial Breakdown
Market Context
Property Details
Enter additional details for a more comprehensive analysis
Financing Options
Include financing details for a complete investment analysis
Cap Rate
Cash-on-Cash Return
Debt Coverage Ratio
5-Year ROI
Monthly Cash Flow Analysis
Investment Insights
Rental Yield Calculation Guide
How to Use This Calculator
This calculator helps you determine the potential return on your property investment by calculating both gross and net rental yields.
Enter Property Value
Input the current market value of the property or its purchase price.
Enter Monthly Rent
Input the expected or actual monthly rental income from the property.
Add Annual Expenses (Optional)
Include your yearly operating costs to calculate net yield. Use the expense breakdown feature for a more accurate estimate.
Review Results
The calculator will display both gross and net yields, with context about how they compare to regional averages.
For a more detailed investment analysis, use the Advanced tab to include factors like vacancy rates and property appreciation.
Understanding Rental Yield
Gross Yield Formula
Annual Rental Income ÷ Property Value × 100 = Gross Yield (%)
Example: £12,000 ÷ £200,000 × 100 = 6% gross yield
Gross yield measures the annual rental income as a percentage of the property value, before any expenses are deducted.
Net Yield Formula
(Annual Rental Income – Annual Expenses) ÷ Property Value × 100 = Net Yield (%)
Example: (£12,000 – £3,000) ÷ £200,000 × 100 = 4.5% net yield
Net yield accounts for operating expenses, giving a more accurate picture of actual returns.
Typical Operating Expenses
When calculating net yield, include these common expenses:
| Expense Category | Typical Cost (UK) | Typical Cost (US) |
|---|---|---|
| Maintenance & Repairs | 1-2% of property value annually | 1-2% of property value annually |
| Property Management | 10-15% of rental income | 8-12% of rental income |
| Insurance | £250-500 annually for typical property | 0.5-1% of property value annually |
| Property Tax | Council Tax: varies by band and location | 1-2% of property value annually |
| Vacancy Costs | 5-8% of annual rental income | 5-8% of annual rental income |
| Service/HOA Charges | Varies by property (often £1,000-2,500 for flats) | $200-500 monthly for condos/apartments |
| Licensing Fees | HMO License: £500-1,000 per 5 years | Varies by municipality |
Expense percentages are approximations and will vary by property type, age, and location.
Regional Yield Comparison
Average rental yields vary significantly by location. Compare your results with these regional benchmarks:
| UK Region | Average Gross Yield (2023-24) |
|---|---|
| North East | 9.3% |
| North West | 8.3% |
| Yorkshire & Humber | 8.6% |
| East Midlands | 7.3% |
| West Midlands | 7.0% |
| Wales | 6.9% |
| Scotland | 7.8% |
| South West | 6.5% |
| South East | 6.4% |
| London | 5.1% |
| UK Average | 6.7% |
Northern regions typically offer higher rental yields due to lower property prices relative to achievable rents.
| US Region | Average Gross Yield (2023-24) |
|---|---|
| Midwest | 7.2% |
| South | 6.8% |
| West | 5.8% |
| Northeast | 5.5% |
| US Average | 6.1% |
Midwest states often show higher yields while coastal areas typically have lower yields but may offer stronger appreciation potential.
Yield by Property Type
Different property types tend to produce varying rental yields:
Apartments/Flats
Typically lower maintenance costs and easier to manage. Studios and one-bedroom flats often produce higher yields than larger units.
Houses
Often have lower yields than apartments but may offer better capital appreciation potential and attract longer-term tenants.
HMOs (Houses in Multiple Occupation)
Higher yields but require additional licensing, more intensive management, and often have higher turnover rates.
Multi-Family Properties
Multiple units within one property can provide higher yields but require more management oversight.
Commercial Properties
Typically offer longer leases but may have extended vacancy periods and higher refurbishment costs.
Factors Affecting Rental Yield
Location
Prime urban locations often show lower yields but may offer stronger capital appreciation. Secondary locations typically offer higher yields.
Property Condition
Newer or recently renovated properties usually command higher rents but also cost more to purchase, potentially resulting in similar yields to older properties.
Property Size
Smaller properties typically generate higher percentage yields than larger ones, as rental values don’t scale proportionally with purchase price.
Local Demand
Areas with high rental demand relative to supply can command premium rents, positively impacting yield.
Property Management
Effective management can reduce vacancy periods and maintenance costs, improving net yield.
Economic Conditions
Interest rates, inflation, and local economic growth all influence both property values and achievable rents.
Practical Tips for Investors
Focus on net yield rather than gross
Net yield provides a more accurate picture of actual returns, accounting for all operating expenses.
Consider total return
When evaluating investments, look at both rental yield and potential for capital appreciation.
Verify rental estimates
Research actual achieved rents in the area rather than relying on asking prices or agent estimates.
Account for vacancy
Always factor in periods where the property may be unoccupied between tenants.
Budget for maintenance
Set aside 1-2% of property value annually for repairs and maintenance to avoid cash flow problems.
Regional research
Research local market conditions, employment trends, and development plans that could affect future property values and rental demand.
Tenant Affordability Insights
Understanding how tenants evaluate rental affordability can help you set optimal pricing and reduce vacancy periods.
Rent-to-Income Ratio
Percentage of tenants likely to consider a property affordable at different rent-to-income ratios.
Optimal Affordability Range
Properties priced within 25-30% of local median household income typically experience lower vacancy rates and longer tenancies.
Benefits of Affordable Pricing
- Larger pool of qualified applicants
- Reduced vacancy periods
- Lower tenant turnover
- Improved long-term net yield
Use our Rent Affordability Calculator to assess how potential tenants view your property pricing.
Net Yield Impact Calculator
See how different expenses affect your net rental yield.
Regional Yield Comparison Table
See how rental yields vary across different regions and property types.
| Region | Apartments | Houses | HMOs |
|---|---|---|---|
| North East | 9.0% | 8.1% | 11.2% |
| North West | 8.0% | 7.3% | 10.5% |
| Yorkshire | 8.2% | 7.5% | 10.7% |
| East Midlands | 7.0% | 6.4% | 9.7% |
| West Midlands | 6.8% | 6.1% | 9.4% |
| Wales | 6.5% | 6.0% | 9.2% |
| South West | 6.1% | 5.7% | 8.9% |
| South East | 5.9% | 5.3% | 8.6% |
| London | 5.3% | 4.2% | 8.1% |
| Scotland | 7.5% | 6.9% | 10.1% |
Data compiled from multiple property research sources (2023-2024). HMO yields are typically higher due to multiple tenancies but involve additional licensing and management requirements.
| Region | Apartments | Single-Family | Multi-Family |
|---|---|---|---|
| Midwest | 7.4% | 6.8% | 9.7% |
| South | 7.0% | 6.4% | 9.3% |
| West | 5.7% | 5.1% | 8.5% |
| Northeast | 5.4% | 4.9% | 8.1% |
Data compiled from multiple property research sources (2023-2024). Multi-family properties typically offer higher yields but may require professional management.