Calculate gross and net rental yield on a property to compare investment opportunities across different areas and price points.
What you're paying, or plan to pay, for the property
Expected monthly rental income
Letting fees, insurance, maintenance, ground rent, voids
Gross yield
6.00%
Before running costs
This result is an estimate only and does not constitute financial advice.
Net yield
5.00%
After running costs, before mortgage and tax
This result is an estimate only and does not constitute financial advice.
Annual rent
£12,000
This result is an estimate only and does not constitute financial advice.
Annual profit
£10,000
Rent minus running costs
This result is an estimate only and does not constitute financial advice.
Rental yield is one of the simplest ways to measure whether a buy-to-let property is a good investment. It expresses the rent you collect each year as a percentage of what the property costs, making it easy to compare very different properties, or the same property against other investment opportunities.
Gross yield is the most basic version of this figure. It's calculated by taking your annual rental income and dividing it by the purchase price, before any costs are taken into account. It's a quick way to screen potential purchases, but on its own it can be misleading, because it ignores everything you'll actually spend on running the property.
Net yield gives a more realistic picture. It subtracts your annual running costs — things like letting agent fees, insurance, maintenance, ground rent and service charges, and void periods between tenants — from your rental income, before dividing by the purchase price. Because it accounts for the real cost of owning and letting the property, net yield is generally the more useful figure when comparing investments.
What counts as a "good" yield varies significantly by location and property type. Yields in city centres and lower-priced regional areas tend to be higher, while properties in expensive areas with strong long-term capital growth often carry lower yields, because rents haven't kept pace with high purchase prices. Many investors look for a balance between yield and the likelihood of the property's value increasing over time.
It's worth noting that neither gross nor net yield accounts for mortgage costs, meaning your actual cash return will be lower if you're buying with a buy-to-let mortgage rather than in cash. They also don't factor in tax, which can materially affect your real return, particularly for higher-rate taxpayers.
Use the calculator above to compare gross and net yield on any property you're considering, and see how running costs affect your true return.
It varies by area, but many investors look for a gross yield of 6% or higher, with some regional and northern UK cities regularly exceeding this. Yields in expensive southern England locations are often lower, closer to 3-4%, but may offer stronger long-term capital growth instead.
Gross yield divides your annual rent by the purchase price, ignoring costs. Net yield subtracts your running costs — letting agent fees, insurance, maintenance, ground rent and voids — before dividing by the purchase price, giving a more accurate picture of your actual return.
No, neither gross nor net yield accounts for mortgage interest or capital repayments. If you're buying with a buy-to-let mortgage, your actual cash return will be lower than the yield figures suggest, especially at higher loan-to-value ratios.
Typical annual costs include letting agent or management fees, landlord insurance, ground rent and service charges for leasehold properties, routine maintenance and repairs, and an allowance for void periods when the property isn't let. Larger one-off costs like major repairs are usually budgeted separately.
Compare landlord insurance quotes to cover your property, contents and rental income.