How to use the net yield calculator
- Enter the purchase price and weekly rent.
- Fill in each annual running cost. Leave a cost at zero if it does not apply, such as strata for a house.
- Set vacancy in weeks and the management fee as a percentage of rent.
- Read the net yield, then open the loan section to see weekly cash flow after interest.
The net rental yield formula
Net yield = (annual rent – vacancy – running costs) / purchase price x 100
Management is charged on the rent actually collected, so it is worked out after vacancy. Loan interest is left out on purpose, so the result measures the property rather than your loan. The full method is on our methodology page, and the difference from gross yield is explained in gross vs net rental yield.
Where to find each cost
| Cost | Where to get it |
|---|---|
| Council rates | The council’s rates notice or online rates calculator |
| Water | The water authority. Landlords usually pay fixed service charges. |
| Landlord insurance | Quotes from two or three insurers. See landlord insurance. |
| Strata or body corporate | The strata manager or the levy notice. See strata fees. |
| Property management | Agency quotes. See property management fees by state. |
| Land tax | Your state revenue office. See land tax by state. |
| Vacancy | Local vacancy rates. See rental vacancy rates. |
What is a good net yield?
For a capital city property, a net yield of 3% or more is reasonable and 4% or more is strong. Compare with gross yield benchmarks by city, remembering net is usually 1 to 2 points lower.
Frequently asked questions
What is net rental yield?
Net rental yield is annual rent minus vacancy and running costs, divided by the purchase price, multiplied by 100. It shows what the property returns before finance.
Should net yield include mortgage interest?
No. Interest depends on your loan, not the property. Keep it out of net yield and look at cash flow instead.
Does net yield include depreciation or tax?
No. Depreciation and tax depend on your personal situation. Use the rental cash flow calculator to estimate the after-tax position.
General information only. This calculator and content do not consider your personal circumstances and are not financial, tax or legal advice. Speak to a licensed professional before making investment decisions.