Rental Yield Calculator

How it is calculated

Three yearly figures go in: the property price, the annual rent and the annual expenses, all in the same currency. The tool computes gross yield = annual rent ÷ price × 100 and net yield = (annual rent − annual expenses) ÷ price × 100, and also shows net income = annual rent − annual expenses. The price must be above zero; rent and expenses cannot be negative, and none of the three can be left blank (type 0 for no expenses). If expenses exceed rent, the net yield and net income come out negative. Only the costs you type are subtracted: the tool does not add purchase costs, taxes, mortgage interest or empty months unless you include them in the expense figure.

Common mistakes

• Entering monthly rent in the annual rent field, which understates the yield by a factor of twelve.
• Leaving out vacancy: if the flat is empty for two months, annual rent is ten months of rent, not twelve.
• Comparing a gross yield from one listing with a net yield from another; compare like with like.
• Putting the mortgage repayment (principal) in expenses. Yield measures the property's return on its price, so financing is normally kept out; only running costs belong here.
• Using the asking price instead of the full amount you paid, or forgetting that purchase taxes and fees raise the true price base.