Rental yield is the yearly rent as a share of the price you pay. It is the quickest way to compare one buy-to-let with another, before you look at the full numbers.
This free calculator works out gross yield, net yield, cash-on-cash return and monthly cashflow from a purchase price and a monthly rent, with your running costs and an interest-only mortgage if you add one.
| Purchase price | £150,000 |
|---|---|
| Monthly rent | £900, so £10,800 a year |
| Gross yield | £10,800 ÷ £150,000 × 100 = 7.2% |
| Running costs | £2,700 a year (letting fees, insurance, repairs) |
| Net yield | (£10,800 − £2,700) ÷ £150,000 × 100 = 5.4% |
Next step
Add stamp duty, buying costs, a mortgage stress test and the tax as a person or a limited company, for one full deal.
Or get every tool with the Founder’s Pass, £199. One-off price, secure checkout by Stripe.
Gross yield is the yearly rent divided by the purchase price, times 100. For example, £10,800 a year on a £150,000 home is 7.2%. Net yield takes the yearly running costs off the rent first, so it is always lower and closer to what the property actually earns.
Gross yield uses the rent before any costs and is handy for comparing properties quickly. Net yield takes off running costs such as letting fees, insurance, repairs, service charges and ground rent. Many investors look at both.
There is no single figure. Yields are usually higher in the North East, North West and Scotland, where prices are lower, and lower in London and the South East, where buyers often expect more capital growth instead. Comparing a deal with similar homes in the same area is more useful than a national rule of thumb.
Gross and net yield don’t. Cash-on-cash return and cashflow do: they compare what the property earns after the mortgage interest with the cash you put in. That is why this calculator shows all three.
Education, not advice. Rules change and depend on your circumstances. Check GOV.UK and speak to a qualified adviser before you act.