Rental Yield Calculator
Enter the property value, monthly rent, annual running costs, the cash you put in and your annual mortgage interest. The calculator shows gross yield, net yield, return on capital invested (ROCI), and gross and net annual income, and you can download the result as a PDF report.
How to calculate rental yield
Rental yield is the rent a property earns in a year as a percentage of what it is worth. There are three figures worth knowing, and the calculator above works out all three from the numbers you enter.
Gross yield
Annual rent divided by property value, multiplied by 100. A property worth £250,000 let at £1,200 a month earns £14,400 a year, a gross yield of 5.76%. It is the figure property adverts quote because it ignores every cost.
Net yield
Annual rent minus annual running costs, divided by property value. If the same property costs £2,000 a year to run, net income is £12,400 and the net yield is 4.96%. This is the better guide to what a property really earns.
Return on capital invested (ROCI)
If you bought with a mortgage, yield on the full property value understates how hard your own money is working. ROCI divides the income left after running costs and mortgage interest by the cash you actually put in. With £62,500 of your own money and £2,100 a year of mortgage interest, the example above returns £10,300 a year, a ROCI of 16.5%.
Which running costs to include
Net yield is only as good as the costs you put in. A realistic figure usually includes:
- Letting agent fees. Tenant find and full management are usually charged as a percentage of the rent, often plus VAT, and the gap between local agents can be large. Compare letting agent fees before assuming a figure.
- Empty periods. Allow for a few weeks without rent between tenants.
- Maintenance and repairs. Older properties need a bigger allowance.
- Insurance, including landlord buildings and liability cover.
- Safety certificates. An annual gas safety check and an electrical inspection at least every five years.
- Service charges and ground rent on leasehold flats, and licence fees where the council runs a licensing scheme.
Mortgage interest is not a running cost for net yield. The calculator treats it separately so you can see both the property's own return and the return on your cash.
What counts as a good rental yield
There is no single right number. Cheaper areas tend to produce higher yields and slower price growth, while expensive areas often yield less but have grown more in value over time. Compare a property against others in the same area, and look at net yield rather than gross, because two properties with the same gross yield can have very different costs.
Tax and the rules that affect your return
Yield is worked out before tax. Individual landlords cannot deduct mortgage interest from rental income and receive a 20% tax credit instead, known as the Section 24 restriction, so higher-rate taxpayers keep less of each pound of net income. Since 1 May 2026 in England, rent can only be increased once a year using a Section 13 notice, and landlords cannot take more than one month's rent in advance, so plan cash flow on that basis. Stamp duty on an additional property also reduces the return in the first year: the stamp duty calculator works it out.
Next steps
To see the monthly payment the rent has to cover, use the buy-to-let mortgage calculator. For ways to lift the numbers, read how to maximise rental yield.
Figures are illustrations based only on what you enter. This is general information, not financial or tax advice.
Frequently asked questions
How do I calculate rental yield?
Divide the annual rent by the property value and multiply by 100 for gross yield. For net yield, take the annual running costs off the rent first. A £250,000 property let at £1,200 a month has a gross yield of 5.76%, and 4.96% net if it costs £2,000 a year to run.
What is the difference between gross and net rental yield?
Gross yield uses the rent alone. Net yield takes off running costs such as agent fees, empty periods, maintenance, insurance and certificates, so it shows what the property really earns.
What is ROCI?
Return on capital invested. It divides the income left after running costs and mortgage interest by the cash you put in, such as the deposit and buying costs. It shows how hard your own money is working when you buy with a mortgage.
Should mortgage interest be included in net yield?
Usually not. Net yield measures the property's own return, so mortgage interest is kept out of it. It belongs in your cash flow and in ROCI, which the calculator shows separately.
What is a good rental yield in the UK?
It depends on the area. Cheaper areas often yield more but grow in value more slowly, and pricier areas the reverse. Compare net yield against similar properties nearby rather than aiming for one national figure.