Investor guide
How to Calculate Rental Yield
Gross vs net yield, explained simply, with a worked example using illustrative figures.
Gross yield
Gross yield = (annual rent ÷ property value) × 100.
Example (illustrative only): a property valued at £120,000 achieving £750 per calendar month (£9,000 per year) has a gross yield of 7.5%.
Net yield
Net yield takes the same calculation but deducts annual running costs - management fees, maintenance, insurance, ground rent or service charge where applicable, and an allowance for void periods - before dividing by the property value. Net yield gives a more realistic picture of what the investment actually returns.
Why yield alone isn't the whole picture
A high headline yield can mask a property that's harder to let, needs more maintenance, or sits in an area with weaker capital growth. We'd always look at yield alongside tenant demand, condition and the likely direction of the local market - see our Stoke-on-Trent investment overview.
Rental Yield Calculator
Enter a property's price and rent to see gross yield instantly - add annual running costs for net yield too.
A simple guide based on the figures you enter - it doesn't account for financing costs, void periods or tax. Talk to us for the fuller picture on a specific property.
How do I calculate rental yield?
Gross rental yield is calculated as annual rental income divided by the property's purchase price (or current value), multiplied by 100. Net yield takes the same calculation but deducts annual costs such as management fees, maintenance, insurance and void periods before dividing by the property value.