How to use the Rental Yield Calculator
- 1 Enter the property value or purchase price.
- 2 Enter the weekly rent.
- 3 Enter the expected vacant weeks a year.
- 4 Enter your yearly costs and read the gross and net yield.
Worked example
A $750,000 property rented at $650 a week, with 2 vacant weeks and $7,500 of yearly costs. Yearly rent is $33,800, a gross yield of 4.51%. After vacancy, rent is $32,500, and after costs the net income is $25,000, a net yield of 3.33%.
Features
Gross and net yield
Both measures investors use to compare properties.
Vacancy allowance
Reduces rent for weeks the property is empty.
All costs
Rates, insurance, strata, management and maintenance.
When to use it
Comparing properties
Compare a house and a unit, or two suburbs.
Buying decisions
Check whether rent covers your costs.
Rent reviews
See how a rent rise changes your yield.
Portfolio review
Compare yields across your properties.
Frequently asked questions
What is rental yield?
Yearly rent as a percentage of the property's value. Gross yield uses rent only, while net yield subtracts costs.
What is a good rental yield in Australia?
Gross yields often range from about 3% in expensive capital city suburbs to 5% or more in some regional areas and units.
What costs should I include?
Council and water rates, landlord insurance, strata levies, property management fees, repairs and land tax. Loan interest is usually excluded from yield.
Is yield the same as return?
No. Total return also includes capital growth and tax effects such as negative gearing and depreciation.
How many vacant weeks should I allow?
One to three weeks a year is a common allowance, depending on the local vacancy rate.
Are rental expenses deductible?
Yes. Most running costs and interest on an investment loan are tax deductible against rental income.
What is land tax?
A yearly state tax on the value of land you own, other than your main home, above a threshold. It can reduce the net yield on investment properties, especially in New South Wales and Victoria.
Should I include depreciation?
Depreciation is a tax deduction, not a cash cost, so it is left out of net yield. It does improve your after-tax return.
What is a cash flow positive property?
A property where rent covers all costs, including loan repayments, leaving a surplus each year.
What is negative gearing?
When rental costs, including loan interest, are more than the rent, the loss can be deducted from other income such as salary, reducing your tax.
Does a high yield mean a better investment?
Not always. High-yield areas can have slower capital growth or higher vacancy. Many investors balance yield and growth.
How do I find market rent?
Look at similar listings on property sites, ask local property managers or check rental reports for the suburb.
Should I use purchase price or current value?
Use purchase price to judge a purchase, and current value to compare your property with other investments today.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated