How to use this calculator
- Enter or choose property price.
- Enter or choose buying costs.
- Enter or choose monthly rent.
- Enter or choose vacancy and unpaid rent.
- Enter or choose management fee.
- The net rental yield updates as you type. Use Copy result or Share to keep it.
Method
Rent collected = Monthly rent × 12 × (1 − Vacancy); Net income = Rent collected − Management − Fixed costs; Net yield = Net income ÷ (Price + Buying costs) × 100
- Vacancy
- share of the year’s rent lost to empty periods and arrears
- Management
- percentage fee on rent collected
- Fixed costs
- property tax, insurance, maintenance, service charge and other annual costs
Worked example
- Rent collected = 1,250 × 12 × 95% = 14,250.
- Costs = 10% × 14,250 + 1,800 + 600 + 1,500 = 1,425 + 3,900 = 5,325.
- Net income = 14,250 − 5,325 = 8,925.
- Net yield = 8,925 ÷ (250,000 + 10,000) × 100 = 3.43%.
A 6% gross yield falls to a 3.43% net yield once vacancy, management and running costs are paid.
What the result means
Compare net yield with what the same money would earn elsewhere at similar risk. The gap between gross and net yield shows how much the running costs eat into the rent.
Assumptions and limits
- Costs are annual amounts you enter; none are estimated for you.
- Mortgage interest and income tax are not deducted, so this is an unlevered, pre-tax yield.
- Large one-off repairs and future rent or cost changes are not modelled.
- Capital growth or loss is ignored.
Questions
Why is my mortgage not included?
Net yield measures the property itself, regardless of how it is financed. To see the return on your own cash after loan payments, use the Cash-on-Cash Return Calculator.
Is net yield the same as cap rate?
Very close. Cap rate is usually NOI divided by price or value, without buying costs; net yield here adds buying costs to the price.
Please note: Returns are illustrations at a constant rate, not predictions or guarantees. Investments can lose value. This is not investment advice.