Yield is the first number property investors quote and the one most often quoted misleadingly, because gross yield ignores every cost of actually owning the thing.
What the Rental Yield does
Calculates both gross yield — annual rent divided by price — and net yield, which subtracts running costs and allows for vacancy.
The gap between them is the whole point. A property advertised at 8.8% gross can land nearer 5% net once management, maintenance, insurance and empty months are counted.
Open the Rental Yield and follow the settings and checks below.
The two figures
| Setting | What it means |
|---|---|
| Gross yield | (Monthly rent × 12) ÷ price |
| Net yield | Gross minus costs, adjusted for vacancy |
| Default price / rent | 300,000 / 2,200 a month |
| Costs to include | Management, maintenance, insurance, tax, fees |
| Vacancy | Weeks empty per year — never assume zero |
| Listings usually quote | Gross — the flattering one |
| Excludes | Mortgage interest — see Cash-on-Cash |
| Is this advice? | No |
How to use it
- Enter price and monthly rent for the gross figure.
- Add real annual costs — management is typically 8–12% of rent.
- Set a realistic vacancy allowance, then compare net against gross.
Practical advice
Never assume zero vacancy. Even a well-run property loses time between tenants, and two or three empty weeks a year is a normal planning assumption. An investor modelling twelve months of rent is overstating income by 4–6% before any other cost, which is often the entire difference between the yield they expected and the one they get.
Common questions
Gross or net — which matters?
Net, always, for a decision. Gross is useful only for quickly comparing listings, and it is what agents quote because it is the larger number. Two properties with identical gross yields can differ substantially once service charges and management are counted.
What counts as a running cost?
Management fees, maintenance and repairs, insurance, service charges or ground rent, property taxes, letting fees and accountancy. Mortgage interest is treated separately — see Cash-on-Cash, which measures the return on your actual cash.
What vacancy rate should I assume?
Two to four weeks a year is a common planning figure in a stable market, more where tenancies turn over quickly. Assuming none is the single most common error in a first rental model.
Is a high yield always better?
Not necessarily, and this tool cannot judge it. High-yield areas often carry lower capital growth, higher management burden or more tenant turnover. Yield is one input to a decision that also involves risk, time and local knowledge — talk to a professional.
Useful next tools
- Cap Rate Calculator — Capitalisation rate from income and property value.
- Cash-on-Cash Return — Annual return on the actual cash you put in.
- Rent vs Buy — Compare renting against buying over your real time horizon.
- Closing Costs Estimator — Estimate the fees on top of the purchase price.
- Mortgage Payoff — How much time and interest extra payments save.
- Profit Margin — Margin, markup and selling price from cost.
Vootkit provides general educational estimates, not mortgage, investment, legal, valuation or financial advice. Lending rules, taxes, transaction costs and property markets vary. Check actual offers and consult appropriately licensed professionals before acting.
Try the tools from this guide
Keep reading
How to Calculate Cash-on-Cash Return for Property
Divides annual pre-tax cash flow by the cash you actually put in — deposit, closing costs and any initial works — rather than by the property price.
How to Estimate Home-Buying Closing Costs
Estimates the one-off costs of completing a purchase from percentages you set, defaulting to 1.5% and 0.75% components against a 350,000 price.
How Much House Can You Actually Afford?
Estimates the property price your income supports, from your deposit, existing debt payments and a debt-to-income limit.