Rental Yield Calculator

What is Rental Yield?

Rental yield measures the annual return on an investment property as a percentage of the property's value. Gross yield uses rent only; net yield deducts expenses like management fees, insurance, rates, and vacancy costs.

How this calculator works

Enter the property value, weekly rent, and your annual expenses. The calculator computes gross yield (annual rent ÷ property value × 100) and net yield (net income after expenses ÷ property value × 100). The vacancy rate adjustment accounts for periods when the property is empty between tenants — typically 2-4 weeks per year. If the net yield is negative (expenses exceed rent), the calculator flags the property as negatively geared and notes the potential tax deduction. Australian investors typically target gross yields of 4-6%.

Gross vs Net Yield

GROSS YIELD = (weekly rent × 52) ÷ property value × 100. Quick comparison metric across listings. NET YIELD = (rental income - all expenses) ÷ property value × 100. The number that actually matters. Typical gap: gross 4.5% → net 2.5-3% after rates, insurance, management fees, repairs, vacancy. Sydney/Melbourne gross yields are usually 2.5-4%; Brisbane/Perth/regional 4-6%; some regional centres 6-8%.

Typical Ongoing Costs (% of property value/year)

Council rates: ~0.3-0.5%. Water rates: ~0.1-0.2%. Building insurance: ~0.15-0.3%. Landlord insurance: ~0.1-0.15%. Property management fees: 7-9% of rent + leasing fees ($500-$1,500 per new tenant) + advertising. Strata levies (apartments): $2k-$8k/yr, more for buildings with pools, lifts. Maintenance/repairs: ~0.5-1.5% pa average. Total ongoing: 1.5-3% of property value annually.

Vacancy and Tenant Turnover

Australian residential vacancy rates 2-5% (varies by city and season). Each new tenant typically takes 1-3 weeks to fill = ~2-3% annual vacancy hit on rent. Higher turnover = higher costs (advertising, condition reports, leasing fees). Long-term tenants (3+ years) reduce these costs dramatically. Vacancy is one of the biggest hidden drags on yield.

Yield vs Capital Growth Trade-off

Generally inverse relationship in Australia: high-yield areas (regional, mining towns) often have lower capital growth; low-yield areas (Sydney/Melbourne inner-ring) typically have higher long-run growth. Investors must choose: cash flow (yield) or wealth accumulation (capital growth). Total return = yield + capital growth — best to think holistically rather than maximising either alone.

Cash-on-Cash Return

More relevant than yield when you have a mortgage. Annual cash flow (after all expenses + mortgage repayments) ÷ cash invested (deposit + costs). Example: $700k property, $140k deposit + $30k costs = $170k cash. Net cash flow $2k/yr → 1.2% cash-on-cash. Most leveraged Australian property is cash-flow negative initially but generates wealth through capital growth + tax benefits + principal reduction.

Improving Rental Yield

(1) Cosmetic renovations (paint, flooring, kitchen, bathroom) increase achievable rent and tenant quality. (2) Granny flat addition can boost gross yield by 30-50%. (3) Furnished short-stay listings (Airbnb) gross 2-3× standard yield but with much higher costs, regulatory risk, and management burden. (4) Long-term tenants who treat the property well are worth more than maximum rent. (5) Annual rent reviews tied to market, not below-market 'good tenant' loyalty.

All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.

Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.