How to calculate rental yield
Gross yield is annual rent divided by property price. Net yield is the number that actually matters, because it subtracts every running cost — and cash-on-cash return tells you what your invested deposit is really earning.
The rule
Gross yield = annual rent ÷ price · Net yield = (annual rent − costs) ÷ total investment
Do it automatically — Rental yield / buy-to-letStep by step
- 1Multiply the monthly rent by 12, then reduce it for expected void periods.
- 2Subtract running costs: management fees, insurance, maintenance, service charges and property taxes.
- 3Divide by the purchase price plus buying costs for net yield.
- 4For cash-on-cash return, divide the post-mortgage cash flow by the cash you actually put in.
What trips people up
- • Mortgage interest relief on rental property is often restricted, hitting higher-rate landlords hardest.
- • One void month is roughly 8% of annual rent gone.
Common questions
What is a good yield?
Net yields around 5%+ are generally considered solid, though this varies sharply by city.
Does capital growth count?
Not in yield — it is a separate, unrealised return until you sell.
Skip the maths
Yield, monthly cash flow and ROI for a rental property.
Open the gross & net yield tool