Rental Yield Calculator
Calculate gross and net rental yields for buy-to-let properties.
Live Results
Real-time
AI Analysis
Included
Enter Your Details
SDLT, legal, survey
Insurance, maintenance, management
Your Results
Gross Yield
5.70%
Save this calculation
Create a free account to save and compare.
What is Rental Yield?
The Rental Yield Calculator is the fundamental tool for evaluating buy-to-let property investments. Rental yield measures the annual return from rental income as a percentage of the property's value - it's the first metric any property investor should calculate when assessing a potential purchase. This calculator shows both gross yield (before costs) and net yield (after running costs), giving you a realistic picture of investment returns. Understanding the difference between these metrics is crucial for comparing opportunities and making informed investment decisions.
How do I calculate rental yield?
This calculator uses standard property investment yield formulas: **Gross Yield** Gross Yield = (Annual Rent ÷ Property Price) × 100 This is the headline figure often quoted by agents and property listings. It doesn't account for any costs. **Net Yield (more realistic)** Net Yield = ((Annual Rent - Annual Costs - Void Costs) ÷ Total Investment) × 100 Where: - Total Investment = Purchase Price + Purchase Costs (SDLT, legal, survey) - Annual Costs = Insurance, maintenance, management, repairs - Void Costs = Lost rent during empty periods **Effective Rent** Effective Rent = Annual Rent - (Weekly Rent × Void Weeks) This adjusts for expected void periods when the property is unlet. **Net Operating Income (NOI)** NOI = Effective Rent - Operating Expenses This is the income available to pay mortgages or distribute to investors.
Key assumptions in this calculation
When to use this calculator
Frequently Asked Questions
What is a good rental yield in the UK?
It depends on location and strategy. In the North and Midlands, 7-10% gross yields are common. In the South East and London, 3-5% is typical but capital growth expectations are higher. Most investors target 6%+ gross yield, with 4%+ net yield after costs. HMOs typically achieve 10-15% gross.
Why is net yield more important than gross yield?
Gross yield ignores all costs and can be misleading. A property with 7% gross yield might only deliver 3% net after accounting for high service charges, insurance, management fees, and void periods. Always calculate net yield for meaningful comparisons between properties.
How do I increase my rental yield?
Options include: increasing rent (market review), reducing purchase price through negotiation, minimising void periods with quality tenants, reducing management costs (self-management), and adding value through conversion (e.g., to HMO). Focus on optimising all parts of the equation.
Should I prioritise yield or capital growth?
This depends on your investment strategy. Cash flow investors prioritise yield for immediate income. Capital growth investors accept lower yields in areas with strong appreciation prospects. Many investors seek a balance - reasonable yield (5%+) in areas with good growth potential.
What costs should I include in running expenses?
Typical BTL costs include: landlord insurance (£200-400/year), maintenance/repairs (typically 5-10% of rent), management fees if using an agent (8-15% of rent), safety certificates (gas, electrical), and a void provision. Leasehold properties add service charges and ground rent.
Important Disclaimer
Rental yields are estimates based on current rents and values. Actual returns depend on market conditions, property specifics, and management quality. Past performance is not indicative of future results. Always conduct thorough due diligence.
Ready to grow your property portfolio?
Get expert property investment tips delivered to your inbox.
Trusted by property investors across the UK