See the rental return on a property

Rental yield

Calculate a property's gross and net rental yield from its price, monthly rent, and annual holding expenses.

Formula

gross yield = annual rent ÷ property price · net yield = (annual rent − annual expenses) ÷ property price

Assumptions

• Measures rental income yield only — excludes mortgage financing costs, capital appreciation, and RPGT on eventual sale.
• Assumes full-year occupancy with no vacancy — real vacancy periods between tenants would lower actual yield.

Frequently asked questions

What's the difference between gross and net yield?
Gross yield is just annual rent divided by property price — quick to calculate but ignores costs. Net yield subtracts annual holding expenses (assessment tax, quit rent, maintenance, insurance) first, giving a more realistic picture of actual return.

Should mortgage payments be included in annual expenses?
No — this measures the property's own rental yield independent of how it's financed. Mortgage interest is a financing cost, not an operating expense, so including it would conflate yield with leveraged return.

How do I know if a yield is good?
It depends heavily on location and property type — compare against similar rental properties in the same area rather than a single nationwide benchmark.