Rental Yield Calculator
Work out gross and net rental yield on an Australian investment property from the price, weekly rent, expenses and purchase costs, with the formula shown.
Gross rental yield
5.20%A $600,000 property renting for $600 a week earns $31,200 a year: a gross rental yield of 5.20% and, after $6,000 of expenses and $25,000 of purchase costs, a net yield of 4.03%.
| Annual rent | $31,200 |
|---|---|
| Gross yield (rent ÷ price) | 5.20% |
| Annual expenses | −$6,000 |
| Net rental income | $25,200 |
| Net yield (÷ price + costs) | 4.03% |
How this was calculated
| Annual rent: $600 × 52 | $31,200.00 |
|---|---|
| Gross yield: $31,200 ÷ $600,00031200 ÷ 600000 | 5.20% |
| Less annual expenses (rates, insurance, management, maintenance, strata) | -$6,000.00 |
| Net yield: ($31,200 − $6,000) ÷ $625,000 (price + purchase costs) | 4.03% |
A $600,000 property renting for $600 a week earns $31,200 a year: a gross rental yield of 5.20% and, after $6,000 of expenses and $25,000 of purchase costs, a net yield of 4.03%.
Source: ATO Last verified How we keep this accurate
How rental yield is calculated
Gross yield is the simplest measure of a rental property’s income: annual rent divided by the price. Net yield adjusts for the costs of holding the property and the full purchase cost, so it can be compared with the interest rate on the loan or with other investments.
- Annual rent = weekly rent × 52.
- Gross yield = annual rent ÷ purchase price.
- Net rental income = annual rent − annual expenses (rates, water, insurance, management fees, repairs, strata).
- Net yield = net rental income ÷ (purchase price + stamp duty, legal and inspection costs).
Gross vs net yield on a $600,000 property
At $600 a week the property earns $31,200 a year, a 5.20% gross yield. With $6,000 of annual expenses and $25,000 of purchase costs the net yield is 4.03%. If the loan rate is 6%, the property is cash-flow negative before tax; the negative gearing calculator shows what that costs after the tax deduction.
What this calculator doesn’t cover
- The loan, the tax effect and capital growth (see the investment property calculator).
- Vacancy and letting fees (the investment property calculator applies a vacancy allowance).
- Commercial property yields, which use net lettable area and outgoings recovered from tenants.
Frequently asked questions
How do I calculate rental yield?
Gross rental yield is the annual rent divided by the property price. A property bought for $600,000 and renting for $600 a week earns $31,200 a year, a gross yield of 5.2%. Net yield subtracts running costs (rates, insurance, management, maintenance, strata) from the rent and divides by the price plus purchase costs, so it is always lower. Both ignore capital growth.
What is a good rental yield in Australia?
Gross yields for houses in the capital cities have generally sat between 3% and 4.5% in recent years, with units and regional properties higher, often 4.5% to 6%. A “good” yield depends on the interest rate: if the loan rate is above the net yield the property is cash-flow negative before tax. Compare like with like, and look at net yield rather than gross.
What is the difference between gross and net yield?
Gross yield uses the rent alone. Net yield deducts the costs of holding the property (rates, water, insurance, agent fees, repairs, strata) and divides by the full cost including stamp duty and legal fees. On the $600,000 example with $6,000 of expenses and $25,000 of purchase costs, gross is 5.2% and net is about 4.0%. Net is the figure to compare with your interest rate.
Does rental yield include the loan?
No. Yield measures the property’s income against its price regardless of how it is financed. Interest, principal repayments and the tax effect are covered by the investment property and negative gearing calculators, which take the same rent and expenses and add the loan and your marginal tax rate.
Should I include vacancy in the yield?
Standard yield figures assume the property is rented all year. For a realistic number, reduce the annual rent by the weeks you expect it to be vacant (two weeks a year is a common allowance) and add letting fees to expenses. The investment property calculator applies a vacancy allowance; this yield calculator shows the headline figure.
Is yield the same as return on investment?
No. Yield is income relative to the price. Return on investment adds capital growth and subtracts all costs, including interest and tax, relative to the cash you put in. A low-yield property can deliver a strong return through growth, and a high-yield one can lose value. Yield is the starting point, not the whole picture.
Sources and assumptions
Related calculators
Embed this calculator on your site
Free for any website. Paste one of the snippets below; the calculator resizes itself, works on mobile and updates automatically when rates change. It shows a small “Powered by AussieCalcs” line underneath.