2024-05-06: You can now choose a rental income period from weekly, monthly or annual.
2024-02-22: Our Chrome extension for calculating gross rental yield now supports OnTheMarket.com properties.
2024-02-20: The Rental Yield Calculator Chrome extension now supports Rightmove.co.uk properties.
2023-09-16: You can now calculate gross rental yield while viewing any web page using our Chrome extension! When viewing a Zoopla.co.uk property it will automatically use the property's price.
Use our calculator to work out your rental return. It works out gross and net annual rental yield as you type. There are three easy steps to follow:
The calculator will automatically display the annual rental yield. It's important to keep in mind that while the tool provides a reliable approximation, actual rental yields can vary based on real market conditions.
Rental yield is a crucial metric used by property investors, lenders, and letting agents to assess the potential return on investment from a rental property. It provides a standardized way to compare different properties and investment opportunities.
There are two main types of rental yield:
The basic formula for calculating annual rental yield is:
Annual Rental Yield = (Annual Rental Income / Property Value) x 100Use our calculator to work out your rental return. It calculates both gross and net annual rental yield as you type. Follow these steps:
The calculator will automatically display both the gross and net annual rental yield. Remember that while this tool provides a reliable approximation, actual rental yields can vary based on real market conditions.
What constitutes a "good" rental yield can vary depending on location, property type, and market conditions. Generally:
However, always consider other factors such as potential for capital growth, local market trends, and your investment goals when evaluating a property.
Several factors can impact rental yield, including:
While often used interchangeably, rental yield and rental return are distinct metrics:
Yield is the ongoing income from an investment, expressed as a percentage of the property's value. It's forward-looking and helps compare different properties.
Return typically refers to the total gain or loss on an investment over time, including both rental income and capital appreciation. It's backward-looking and gives a holistic view of the investment's performance.
For example, a property might have a high rental yield but low capital growth, or vice versa. Considering both metrics gives a more complete picture of an investment's performance.
While rental yield is a valuable metric, it shouldn't be the sole factor in property investment decisions. Consider these limitations:
Always consider rental yield alongside other factors and seek professional advice for comprehensive investment decisions.
It depends on your goal. Using the purchase price gives you a historical perspective on your investment's performance. Using the current market value provides a more up-to-date view of the property's performance relative to the current market.
It's a good practice to recalculate rental yield annually or whenever there are significant changes in rental income or property value. Regular recalculation helps you stay informed about your investment's performance.
Net yield is always lower than gross yield because it accounts for expenses. If the difference is very large, it might indicate high operating costs, which could be an area to investigate for potential savings.
Ready to calculate your rental yield? Use our calculator above to get started. Remember, while this tool provides valuable insights, it's always advisable to consult with a financial advisor or property professional for personalized investment advice.