Rental yield calculator
Gross yield is the number in the advert. Net yield, after costs and empty months, is the one you actually get.
Your figures
Result
- Rent collected$8,80079.3%
- Yearly costs$1,50013.5%
- Empty months$8007.2%
- Gross yield
- 6.40%
- Monthly cash flow
- $608.33
- Net income per year
- $7,300
- Total invested
- $165,000
- Purchase costs
- $15,000
- Years to recover the investment
- 22.6
What we assume
- Tax is not deducted. Rental income is taxed and that cuts the real return; the rate depends on your situation.
- Yield is measured against the total invested, purchase costs and renovation included, not just the headline price.
- Empty months are the figure most people leave out and the one that moves the answer most.
- No mortgage is assumed. Leverage changes the return on your own money substantially, in both directions.
- Property price appreciation is not included: this is the income return, not the total return.
How it is calculated
Gross yield is the naive figure:
gross = annual rent / purchase price x 100
Net yield is the honest one:
net = (rent for the months let - running costs) / total invested x 100
Two things change between them: the denominator grows to include what the purchase actually cost you, and the numerator shrinks by the costs and the empty months.
Why the gap is so wide
Purchase costs alone are commonly 10% of the price. One empty month is over 8% of the year's rent. Add running costs and a 6% gross yield can land near 3.5% net. The gross figure is not wrong, it just answers a question nobody has.
An example
A 150,000 flat with 15,000 of purchase costs, renting at 750 with 1,200 of yearly costs and one empty month: gross yield 6%, net yield about 4.3%.
Frequently asked questions
How many empty months should I assume?
At least one. Zero assumes a tenant who never leaves and no gap between contracts, which is not how it works. Two is prudent in a slow market.
What counts as purchase costs?
Transfer tax or VAT, notary, land registry, agency fees and any legal advice. Usually around 10% of the price, and always part of what you actually invested.
What about tax?
Not deducted here, and it matters. The applicable rate and any deductions depend on your circumstances, so the net figure shown is before tax.
Keep calculating
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- Rule of 72 calculator The mental shortcut everyone knows, next to the exact answer. And how much the shortcut is off by at your rate.
- Simple interest calculator Simple interest always pays on the original capital and never on what you have already earned. Here it sits next to compound, which is where the difference shows.
- CAGR calculator Two figures and a term give the constant rate that would have taken the first to the second. It is the honest way to compare investments of different lengths.
- ROI calculator ROI is a simple division that gets misused constantly: 50% in six months and 50% in ten years give the same figure. So here it comes annualised too.
Updated on 2026-08-26. Calculations run in your browser; nothing you type is sent to a server.