Rental Yield Calculator

Gross rental yield = (Annual rent ÷ Property value) × 100. Example: £10,000 annual rent on a £200,000 property = 5% gross yield. Net yield deducts annual costs (mortgage interest, agent fees, insurance, maintenance, void periods) before dividing. Our calculator handles both instantly.

A gross rental yield above 5% is generally considered good for UK buy-to-let. The UK average is around 4–5%. Northern cities like Manchester, Liverpool, and Leeds often achieve 6–8%. London typically yields 3–4% due to high property prices relative to rents.

Gross yield = (annual rent ÷ property value) × 100. Simple but ignores all costs. Net yield deducts your annual costs — mortgage interest, letting agent fees (8–15% of rent), landlord insurance, maintenance, and void periods — before the calculation. Net yield shows your real return.

Include: mortgage interest payments, letting agent fees (8–15% of annual rent), landlord insurance (typically £150–£300/yr), maintenance and repairs (budget 1% of property value/yr), gas safety certificate (£60–£100/yr), and void periods (budget 1 month empty per year as a safety margin).

It depends on your investment strategy. Higher-yield properties (typically in northern cities) deliver stronger monthly income but lower capital appreciation. London and the South East tend to offer lower yields (3–4%) but historically stronger capital growth. A balanced buy-to-let portfolio often includes both types.

You can improve rental yield by: increasing rent to market rate when tenancy renews, reducing management costs (switching from full management to let-only), adding a bedroom (loft conversion or garden room), or buying in a higher-yield area. Reducing void periods by retaining good tenants also improves effective yield.

Net initial yield (NIY) is a commercial property metric calculated as the annual net rent divided by the purchase price (including all acquisition costs such as stamp duty and legal fees). For example: £20,000 net annual rent on a property costing £400,000 all-in = 5% net initial yield. It is widely used by commercial property investors and surveyors to compare investments.

Cash flow in buy to let investments is the monthly income remaining after all costs are deducted from rent. For most landlords, the buy to let mortgage is the largest single cost — a 75% LTV mortgage on a £200,000 property at 5% interest costs around £625/month. Add letting agent fees (8–12%), combined maintenance insurance cover (approximately £200–£400/year), void periods, and service charges, and cash flow can turn negative despite a healthy-looking gross yield. Net yield accounts for all of these. For long term planning, always model your cash flow alongside your gross and net yield — a property with 6% gross yield but heavy mortgage payments may generate less actual monthly income than one with 5% gross yield held with no financing.