Rental Yield Calculator Gross & Net Yield, Cash-on-Cash Return, Cap Rate
Calculate all four key rental property metrics in one place: gross yield (annual rent as a % of price), net yield (after expenses), cash-on-cash return (on your actual cash invested) and cap rate (financing-neutral NOI measure). Enter the property price, all purchase costs, monthly rent, vacancy rate and itemised expenses. Switch between all-cash and mortgage financing. See monthly cash flow, a full expense breakdown and a three-scenario analysis (pessimistic, base, optimistic) to stress-test the investment.
Gross Yield, Net Yield, Cash-on-Cash & Cap Rate
Enter property details and all costs. Results update live as you type.
Rental yield benchmarks
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Gross Yield, Net Yield, Cash-on-Cash & Cap Rate — Which Matters?
Most amateur property investors make decisions based on gross yield alone. This is a mistake. Gross yield is a starting filter, not a decision metric. Understanding all four yield measures — and when each is most useful — separates informed property investors from those who buy on gut feel.
Real Rental Property Expenses — What Investors Underestimate
New property investors consistently underestimate running costs. Understanding the true expense picture before buying prevents costly surprises.
The 1% maintenance rule
Budget 1–2% of the property’s value per year for maintenance and repairs. For a $250,000 property, this is $2,500–$5,000 per year. This seems high until a boiler fails ($3,000–$5,000), a roof requires repair ($5,000–$15,000), or a bathroom needs refurbishment ($3,000–$8,000). These costs do not occur every year, but averaged over 10–20 years of ownership, the 1% rule is conservative rather than generous.
Vacancy rate — the silent yield killer
A 5% vacancy rate means the property sits empty for approximately 2.6 weeks per year on average. In practice, this occurs as occasional month-long voids between tenancies rather than as a steady partial occupancy. At $1,500/month rent, a 5% vacancy rate reduces annual income by $900 — a meaningful impact on net yield. Budget 3–5% vacancy for well-maintained properties in strong rental markets, 5–10% for properties in less liquid markets or areas with seasonal demand.
Management fees — worth the cost?
Letting agents typically charge 8–12% of rent for full property management. For a property renting at $1,500/month, this is $1,440–$2,160/year. Self-managing saves this cost but adds significant time — tenant finding, maintenance coordination, legal compliance, rent collection and disputes. For investors with multiple properties or those living far from the rental, professional management usually makes economic sense despite the cost.
LazyTools vs Other Rental Yield Calculators
| Feature | LazyTools | SmartPropertyInvestment | Property Investment Project | Calculator.io |
|---|---|---|---|---|
| 4 yield metrics | ✅ Gross, Net, CoC, Cap | ⚠ Gross + Net | ⚠ Gross + Net | ⚠ Gross only |
| Mortgage calculator | ✅ Yes (P&I) | ✅ Yes | ⚠ Basic | ❌ No |
| Expense breakdown | ✅ 6 categories | ✅ Yes | ⚠ Limited | ❌ No |
| Scenario analysis | ✅ 3 scenarios | ❌ No | ❌ No | ❌ No |
| Vacancy rate | ✅ Yes | ✅ Yes | ⚠ Basic | ❌ No |
| No account required | ✅ Yes | ⚠ Soft gate | ✅ Yes | ✅ Yes |
Rental Yield Benchmarks by Property Market Type
| Market type | Typical gross yield | Typical net yield | Characteristic |
|---|---|---|---|
| Prime city centre (London, Sydney CBD) | 3–5% | 1.5–3% | Low yield, high capital growth potential |
| Secondary city (Leeds, Brisbane) | 5–8% | 3–5% | Balanced yield and growth |
| Regional towns | 7–12% | 4–8% | Higher yield, lower capital growth |
| Student / HMO | 10–18% | 5–10% | High gross yield, high management cost |
| Commercial (office/retail) | 5–10% | 4–7% | Longer leases, higher vacancy risk |
| Holiday let / short-term rental | 10–20%+ | 3–8% | High gross, high costs and seasonality |
Frequently Asked Questions
This calculator is for informational purposes only and is not financial or investment advice. Property investment carries risk. Consult a qualified financial adviser before making investment decisions.
Gross yield = (Monthly rent x 12) / Purchase price x 100. Net yield = (Annual rent - Annual expenses) / Purchase price x 100. Enter all details in the calculator above for all four metrics instantly.
Above 7% gross is generally considered good. 5-7% is average. Below 5% is low but may be acceptable in high capital growth areas. Net yield of 3-5% is typical after expenses. Cash-on-cash return above 5-8% is good for leveraged investments. These vary significantly by market.
Gross yield ignores all expenses. Net yield deducts operating expenses (insurance, maintenance, management, voids) but not mortgage. Net yield is 2-3 percentage points lower than gross yield for most residential properties. Always calculate net yield before making a decision.
Annual cash flow (after mortgage) / cash invested x 100. The most relevant metric for mortgaged buy-to-let. It shows the return on your actual cash outlay (deposit + purchase costs) rather than the property's total value.
Select GBP currency. Enter purchase price, stamp duty, legal fees, monthly rent and expenses. Switch to mortgage mode and enter deposit, rate and term. See gross yield, net yield, cash-on-cash return, monthly cash flow and scenario analysis. Free, no account.
Landlord insurance, maintenance and repairs (budget 1-2% of value per year), letting agent management fees (8-12% of rent), ground rent and service charges (leasehold), void periods (use vacancy rate slider). Mortgage payments are added separately in mortgage mode.
Cap rate = Net Operating Income / Total property cost x 100. NOI excludes mortgage. Cap rate is financing-neutral, useful for comparing properties regardless of how they are funded. Standard in commercial property analysis but equally applicable to residential.
5% vacancy means 95% of annual rent is collected. On $1,500/month rent, 5% vacancy = $900 less income per year. This reduces net yield and cash-on-cash return directly. Always include a realistic vacancy assumption - 3-5% for strong markets, 5-10% for softer markets.