Rental Yield Calculator
Calculate rental yield and cash flow from your rent, property costs and mortgage payments.
Your rental property
Enter rent and annual costs. Results update as you type.
Your rental return
Example inputsCheck the highlighted fields to calculate your rental return.
- $24,000
- Before mortgage interest, principal payments and tax.
- 5%
- 4%
- $30,000
- $0
Annual income and costs
| Rent before vacancy | $31,200 |
|---|---|
| Rent lost to vacancy | $1,200 |
| Property expenses | $6,000 |
| Mortgage interest paid | $18,000 |
| Mortgage principal repaid | $6,000 |
| Rent counted for assessment | Unavailable |
Gross Rental Yield
Gross rental yield is annual rent divided by the property value or cost you choose, multiplied by 100. This calculator deducts your vacancy allowance first, so the result is a vacancy-adjusted gross yield.
Weekly rent is multiplied by 52 and monthly rent by 12. The vacancy deduction is annual rent multiplied by vacant weeks divided by 52.
With $600 weekly rent and two vacant weeks, annual rent is $30,000. Against a $600,000 property, gross yield is 5%. Removing the vacancy allowance raises gross yield to 5.2%.
Current value compares income against what the property is worth now. Purchase cost compares income against your original outlay. Include buying costs in that figure if you want a return on total acquisition cost, and use the same basis when comparing properties.
The optional assessment percentage gives a separate rental-income subtotal. For example, counting 80% of $30,000 gives $24,000. You supply that percentage; it is not a current lender policy or an approval estimate. It changes neither rental yield nor cash flow.
Net Yield After Property Expenses
Net rental yield subtracts annual operating expenses from rent after vacancy, then divides the remaining income by the same property value or cost. Include management fees, maintenance, insurance and other costs the owner pays.
The starting example has $2,100 in management fees, $1,500 in maintenance, $1,200 in insurance and $1,200 in other property expenses. Those $6,000 of expenses leave $24,000 of annual income and a 4% net yield. Enter annual dollar totals, including any percentage-based management fee converted to dollars.
Keep mortgage interest and principal out of these property-expense fields. Add them in the mortgage section so you can compare the property's operating return with its financed cash flow. Moneysmart's property investment guide explains ongoing property costs and the risk of periods without tenants.
Cash Flow With a Mortgage
Annual cash flow before tax is income after property expenses minus mortgage interest and principal paid during the year. Principal reduces the loan balance while still using cash, so it appears separately from interest.
In the starting example, $24,000 remains after property expenses. Paying $18,000 in interest and $6,000 in principal leaves $0 cash flow before tax.
With the same property and interest but no principal payments, cash flow is $6,000. Net rental yield stays at 4% in both cases.
Use interest and principal totals for the same year as your rent and costs. For an amortising loan, take them from a repayment schedule or loan statement. Multiplying the opening balance by the interest rate does not capture the declining balance through the year.
Download the results as a comma-separated values (CSV) file to open in Excel or another spreadsheet. The file contains your inputs and plain-number results, so you can retain the assumptions behind a property comparison.
Residential and Commercial Examples
Residential and commercial rental yield use the same arithmetic. Enter the rent and owner-paid expenses that apply to the lease. A commercial lease can allocate outgoings between owner and tenant; this calculator makes no assumption about who pays them.
| Annual amount or return | Residential example | Commercial example |
|---|---|---|
| Property value | $600,000 | $1,000,000 |
| Rent and vacancy | $600 a week; 2 weeks vacant | $6,000 a month; no vacancy |
| Rent after vacancy | $30,000 | $72,000 |
| Owner-paid property expenses | $6,000 | $12,000 |
| Income after property expenses | $24,000 | $60,000 |
| Gross yield after vacancy | 5% | 7.2% |
| Net rental yield | 4% | 6% |
These are hypothetical examples, not market yields. For a commercial comparison, use rent and expenses on a consistent goods and services tax (GST) basis. The calculator does not determine GST treatment, calculate credits or model lease incentives and rent reviews.
What the Yield Cannot Predict
Rental yield measures income relative to the value or cost you enter. It does not forecast capital growth, tax benefits, future vacancy or changes in rent and expenses. A positive net yield can coexist with negative cash flow when mortgage payments exceed operating income.
The result excludes income tax, depreciation and sale proceeds. It also excludes buying costs unless you include them in the cost field. Compare properties using the same vacancy, expense and value basis, then increase vacancy or costs to see how much cash you would need to cover a shortfall.