Rental yield calculator

Work out the yearly return on a rental property as a share of its price, before and after costs.

Uses only the numbers you enter.

Letting fees, insurance, repairs, service charge and ground rent. Leave out mortgage interest.

Result

A rent of £1,000.00 a month on a £200,000.00 property is a gross yield of 6%.

% gross yield a year

Rent a year£12,000.00
Net yield, after costs4.8%

Show the workings
StepSumAnswer
Rent a year£1,000 × 12£12,000.00
Gross yield£12,000 ÷ £200,000 × 1006%
Net yield(£12,000 − £2,400 costs) ÷ £200,000 × 1004.8%

What this leaves out or assumes

  • Before tax and mortgage interest. Months with no tenant lower the real return.

Where the figures come from

This sum uses only the numbers you entered.

Gross and net yield

Gross yield is a year's rent divided by the price of the property. Net yield takes off the yearly costs first: letting agent fees, insurance, repairs, and any service charge and ground rent. Neither includes mortgage interest or tax, which depend on how you buy and your own tax position.

A second home or buy-to-let usually pays the higher rates of stamp duty, which adds to what you pay at the start. The second homes calculator works that out. This gives information, not advice.

Work out something else