Use 0 when rent or annual costs are genuinely zero. Enter the rent you expect to receive; account for any vacant months consistently.
ESTIMATED NET RENTAL YIELD
0.00%
Enter property value, rent and annual costs to calculate.
Compare properties
iCompare rental yields
iThe chart is unavailable. The exact comparison figures are shown below.
| Property | Gross yield | Net yield | Annual income after costs |
|---|
Property labels show price, monthly rent and annual costs. The chart and table update with each complete property.
A simple estimate based on property value, rent and the operating costs you enter. It does not calculate mortgage finance, tax, purchase costs or capital growth.
How rental yield is calculated
Rental yield compares a property’s annual rent with its value. Gross yield uses rent before operating costs. Net yield deducts the annual operating costs you enter first. These figures help compare potential rental income relative to a property’s value, but they are not a complete measure of investment return.
Annual rent = monthly rent × 12. Gross yield = annual rent ÷ property value × 100. Net annual income = annual rent − annual operating costs. Net yield = net annual income ÷ property value × 100.
Worked example: £200,000 property at £1,200 per month
Suppose the property has £3,000 in annual operating costs. The calculator works through these steps:
| Step | Calculation | Result |
|---|---|---|
| Annual rent | £1,200 × 12 | £14,400 |
| Gross yield | £14,400 ÷ £200,000 × 100 | 7.20% |
| Net annual income | £14,400 − £3,000 | £11,400 |
| Net yield | £11,400 ÷ £200,000 × 100 | 5.70% |
The £3,000 operating cost reduces yield by 1.50 percentage points. Changing the property value, rent or annual costs changes the result; costs greater than the rent produce a negative net yield.
Comparing rental properties
Enter one property, then add up to two alternatives. Each property has its own price, monthly rent and annual operating costs. The chart puts their gross and net yields on the same percentage scale. Compare the dark net bars for yield, and the gap between each pair for the effect of costs. The accompanying table shows exact percentages and annual income after costs, including negative amounts.
A higher net yield does not automatically mean a better purchase. Check likely demand, repairs, condition and financing, as well as annual income. If you plan to borrow, use the Mortgage Calculator to estimate repayments and the Affordability Calculator to explore a borrowing range. Neither figure is included in the yield shown here.
Which annual costs should I enter?
Use an annual estimate of the recurring operating costs you expect to pay yourself. Depending on the property, this might include:
- letting and management fees;
- insurance, service charges or ground rent you pay;
- routine repairs, maintenance and safety checks;
- advertising, tenant changeover and other recurring letting costs;
- a vacancy allowance, if the monthly rent represents 12 fully occupied months.
For a one-off cost, decide whether it belongs in an annual operating estimate or in a broader investment calculation. Use the same approach for every property being compared. Do not deduct lost rent twice: either reduce expected rent for vacant months or include a vacancy allowance in costs.
What this calculator includes and excludes
It includes the property’s entered value, monthly rent and annual operating costs. It reports annual rent, gross yield, income after entered costs and net yield for each complete property.
It does not automatically include:
- mortgage interest, capital repayments or other finance costs;
- income tax, tax relief or taxable rental profit;
- deposit, Stamp Duty Land Tax, Land Transaction Tax or Land and Buildings Transaction Tax;
- purchase fees, renovation spending or eventual sale costs;
- changes in property value, capital growth or capital losses;
- unentered vacancies, arrears, unexpected repairs or rent changes.
If you add finance costs to the annual costs input, the displayed result will no longer describe operating net yield on the same basis. To assess cash flow after borrowing, compare rent and expenses with repayments from the Mortgage Calculator separately. For a potential purchase in England or Northern Ireland, the Stamp Duty Calculator can help estimate SDLT; a purchase in Wales uses the LTT Calculator; and one in Scotland uses the LBTT Calculator. Purchase taxes are not included in this yield. HMRC’s rules for taxable rental profit are also different from this estimate.
Gross yield, net yield and cash flow
Gross yield is a quick rent-to-price comparison. Net yield reflects the operating expenses entered, so two properties with the same gross yield can have different net yields. Cash flow asks how much money remains after all actual payments, including financing where applicable. A property can have a positive net operating yield while its monthly cash flow after debt payments is negative. If reviewing a property you already own, the Remortgage Calculator can help explore a different rate or term.
Why rental yield estimates can differ
Published yields may use asking rent, achieved rent, purchase price, current market value or a wider acquisition cost as the denominator. They may also include different costs. This calculator divides by the property value entered and deducts only the annual operating costs entered, so check the assumptions before comparing its result with another figure.
Important note
This estimate is for general information and is not financial, tax or investment advice. Rent, costs, voids and property values can change. Confirm the figures and seek appropriate professional advice before making an investment decision.
Frequently Asked Questions
What is a good rental yield in the UK?
There is no universal target. A yield should be judged alongside local rents, property condition, financing, likely vacancies, repair costs, capital risks and your own objectives.
What is the difference between gross and net rental yield?
Gross yield divides annual rent by property value. Net yield first deducts the annual operating costs you enter, then divides the remainder by property value.
Can net yield be negative?
Yes. If the annual operating costs entered exceed annual rent, annual income after costs and net yield are negative. The comparison chart extends left of zero to show this.
Does this calculator account for void periods?
Only if you allow for them in your inputs. Reduce the expected rent to reflect months without a tenant or put an equivalent allowance in annual costs, but avoid counting the same shortfall twice.
Does it include a mortgage?
No. Mortgage interest and repayments are not included automatically. Use the Mortgage Calculator to understand potential repayments and assess cash flow separately from operating yield.
Is net yield the same as taxable profit?
No. This is a simple investment estimate using the expenses you enter. HMRC has specific rules for allowable expenses and residential finance costs; use its guidance or professional tax advice for taxable profit.
Which property value should I enter?
Enter the purchase price when comparing potential purchases on the same basis, or a current market estimate when reviewing an existing property. State the basis consistently across comparisons.
Can I compare properties with different rents and expenses?
Yes. Add up to two properties, each with its own price, monthly rent and annual operating costs. An unfinished comparison is omitted from the results until all three fields are valid.
Why can two properties have the same net yield?
Different prices, rents and operating costs can produce the same percentage. Read the annual income figures and gross-to-net gaps alongside the net yields to see those differences.
Do higher yields guarantee higher returns?
No. Yield omits financing, tax, capital changes and many risks. Higher advertised rent may also be harder to achieve consistently.
Sources and review
The formula uses annual rental income divided by property value, with entered operating costs deducted for the net estimate. Tax treatment and allowable expenses are separate questions. These sources explain the underlying concepts:
- RICS: yield and capital value
- HMRC: rental income and allowable expenses
- HMRC: residential landlord finance costs
Review the live source guidance and your own costs before relying on an estimate.