Rental yield calculator
Work out the gross and net yield on a buy-to-let property, after empty weeks, letting agent fees and running costs.
Gross yield 6%, net yield 4.36%, net income £10,892 a year.
| Rent for a full year | £15,000 |
|---|---|
| Rent after 2 empty weeks | £14,423 |
| Letting agent fees | −£1,731 |
| Other costs | −£1,800 |
| Net income before finance costs | £10,892 |
Rates checked 24 October 2026 against standard yield formulas. For guidance only, not tax or legal advice.
How rental yield is worked out
Gross yield = yearly rent ÷ property price × 100. It ignores costs, so it is useful for a quick comparison between properties.
Net yield = (yearly rent − empty weeks − agent fees − running costs) ÷ property price × 100. It is closer to what the property actually earns.
Example. A £250,000 flat let at £1,250 a month earns £15,000 a year, a gross yield of 6%.
With two empty weeks (£14,423 collected), a 12% agent fee (£1,731) and £1,800 of other costs, net income is £10,892, a net yield of about 4.36%.
Net yield here is before mortgage interest and tax. Add your yearly mortgage interest to see cash flow. Individual landlords can’t deduct mortgage interest from rental income; instead they get a tax credit at the basic rate (20%) on finance costs.
What counts as a good yield?
There is no single answer: yields depend on the area, the type of property and how much work it needs. Cheaper areas tend to have higher yields and slower price growth; expensive areas the reverse. Compare like with like, using net yield, and allow for repairs and periods without a tenant.
Costs to include
- Letting agent fees: often quoted excluding VAT, so add 20%.
- Landlord insurance, repairs and maintenance.
- Gas safety certificate, electrical safety report (EICR) and EPC.
- Ground rent and service charge for leasehold flats.
- Selective or HMO licence fees, where your council requires one.
- Deposit protection, if your agent doesn’t include it.
Rental yield calculator questions
What is the difference between gross and net yield?
Gross yield uses the full rent before any costs. Net yield takes off empty weeks, agent fees and running costs, so it is always lower and closer to what you actually earn.
Should I use the purchase price or the current value?
Use the purchase price (plus buying costs, if you want to be precise) to judge a purchase. Use today’s value to judge whether the money is still working well where it is.
Does the calculator include mortgage costs and tax?
Net yield is before mortgage interest and tax. You can add yearly mortgage interest to see cash flow before tax.
Do letting agents have to run AML checks?
Letting agents fall under the Money Laundering Regulations for lettings where the rent is £10,000 or more a month. They must then check the identity of both landlord and tenant.
Sources
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