Rental Yield Calculator: How to Work Out Gross and Net Yield

Rental yield is a year's rent shown as a percentage of what the property cost. Multiply the monthly rent by 12, divide by the price, then multiply by 100. That's your gross yield.

Take the running costs off the rent first and you get the net yield. Gross is the quickest way I know to compare one property with another. Net shows how much of the rent you keep.

Article updated: October 2026

How to work out rental yield

Price, rent and running costs go into the calculator above, and gross and net yield come out. It's a simple investment property calculator, and here's the arithmetic it does, so you can check any yield you're quoted.

Gross rental yield formula

Gross rental yield = (monthly rent × 12) ÷ property price × 100

1. Multiply the monthly rent by 12 to get the annual rent.
2. Divide the annual rent by the price of the property.
3. Multiply by 100 to turn it into a percentage.

Using the calculator's own example: £900 a month is £10,800 a year. £10,800 divided by £150,000 is 0.072. Multiply by 100 and the gross yield is 7.2%.

Net rental yield formula

Net rental yield = ((monthly rent × 12) − annual costs) ÷ property price × 100

Same property, now with £2,400 a year of running costs. £10,800 minus £2,400 leaves £8,400. Divide that by £150,000 and you get 0.056, so the net yield is 5.6%.

That £8,400 works out at £700 a month. It's the "monthly rent after costs" figure the calculator shows under the yields.

What goes in annual costs

Annual costs are whatever the property costs to run over a year. The usual ones are:

• Letting and management fees
• Repairs and maintenance
• Landlord insurance
• Ground rent and service charge, if it's a flat
• An allowance for empty months between tenants

Our guide to buy-to-let costs goes through most of these, from letting fees to empty months.

Whether you include mortgage interest is up to you. The calculator treats it as just another cost. Leave it out and you get the yield on the property itself. Put it in and you get a yield after mortgage interest, which shows the rent left after interest as a percentage of the price.

The price in the calculator is just the price. It doesn't add stamp duty, legal fees or a refurb. Some investors add those to the price to get a yield on the total money in, which gives a lower yield. The buy to let stamp duty calculator works out the stamp duty part (Scotland and Wales have their own versions, with different rates). Whichever way you do it, two yields only compare properly when they're worked out the same way.

Why the price you pay changes the yield

The yield on an investment property is worked out on the price, so a lower price pushes it up. If the same property cost £135,000 instead of £150,000, the same £900 a month (£10,800 a year) gives 8.0% gross, up from 7.2%.

That's why the discount matters with below market value properties. The yield that counts is the one on the price you actually pay, not on what the property is said to be worth.

Gross vs net rental yield

I always start with gross. It's simpler, it's what buyers, sellers and agents use most, and it gives you a very quick baseline to compare one property, and one location, with another.

It's not perfect though, because it misses the detail.

The running costs of a holiday let are much higher than a buy-to-let. If someone told you a buy-to-let was 8% and a holiday let was 10%, the holiday let sounds higher. But the costs are much higher, so the net outcome could be the other way round.

Here it is with made-up round numbers, not real holiday-let costs, just to show the arithmetic.

Put both properties at £200,000. The buy-to-let at 8% brings in £16,000 a year. The holiday let at 10% brings in £20,000. Now say the buy-to-let costs £3,000 a year to run and the holiday let £10,000. That leaves £13,000 against £10,000. On net, it's 6.5% for the buy-to-let and 5.0% for the holiday let.

The one that looked lower on gross comes out ahead. So gross is for a quick first comparison between similar properties. Net shows what you keep once the property has paid its own running costs.

What is a good rental yield in the UK?

Half of the postcode districts in England, Scotland and Wales average a gross yield of 4.4% or less, and about one in ten average 6% or more. In my experience, buy-to-let investors are usually looking for 6% gross or more.

There's no single number, but those two things together give you something to judge any figure against.

Average rental yield in the UK

In September 2026, the average long-let gross yield across those 1,753 postcode districts was 4.6%. The median, the district in the middle, was 4.4%.

Where gross yields actually sit

Each district figure is an average gross yield on long lets, worked out from asking prices and asking rents in the September 2026 data. 785 more districts had no average rent figure, so they don't have a yield. The lowest district came in at 2.4% and the highest at 12.0%.

This is how many districts reached each level:

• 4% or more: 1,238 districts (70.6%)
• 5% or more: 520 districts (29.7%)
• 6% or more: 182 districts (10.4%)
• 7% or more: 63 districts (3.6%)
• 8% or more: 28 districts (1.6%)
• 10% or more: 2 districts

The 85 Scottish districts in the data had a median of 5.6%, against 4.4% across all districts.

These are district averages. A single property can sit well above or below the average for its district, depending on what it is and what you pay for it.

Higher-yield districts were cheaper on average. In September 2026, the 10% of districts with the lowest yields had an average asking price of about £553,000. The 10% with the highest yields averaged about £210,000. BD1 in Bradford had both the highest yield and the lowest average asking price.

What investors typically look for

In my experience, 8% and above is the top end of what buy-to-let investors find. HMOs and holiday lets come with higher gross figures, and holiday lets cost much more to run. Here's roughly what I see investors looking for, by type of let:

Set that next to the data. 6% gross was reached by 182 district averages, and 8% by just 28. So 8% gross is above the average in about 98% of these districts.

The HMO and holiday-let figures only compare fairly once you know the running costs, as the holiday-let example shows. For a shared house, the HMO yield calculator works with rooms, room rents, occupancy, set-up costs and monthly running costs.

For UK rental yield figures town by town, our best buy-to-let locations guide puts 169 locations in one table, with the average asking price and rent and each one's highest postcode yield.

Is 7% a good rental yield?

A 7% gross yield is higher than the average in more than 96% of postcode districts. Only 63 districts averaged 7% or more in September 2026.

The calculator's own default example comes out at 7.2%. Only 49 district averages were that high or higher. That's a useful reality check on any example you're shown.

Three things change a quoted yield: whether it's gross or net, which price it's worked out on, and which rent. The rent a tenant pays now and a projected rent are different numbers, and a yield is only as reliable as the rent behind it.

Most of the districts at 7% or more are in the north of England and in Scotland. The Glasgow (G) postcode area alone has 13 of them. The Liverpool (L) area has six, and the Leeds (LS), Newcastle (NE) and Aberdeen (AB) areas have five each.

Once you know the yield you're after, you can test it on real deals. The buy to let properties for sale on our listings page each show the price and the gross yield, and most show the monthly rent, so you can run them through the calculator above.

Rental yield is not profit

The calculator doesn't add tax or buying costs for you. And net yield only counts your mortgage if you put the interest into annual costs.

Take the calculator example again. After £2,400 of running costs, the rent leaves £8,400 a year, or £700 a month. Now say there's a mortgage, and the interest comes to a made-up £300 a month.

The £700 a month drops to £400. Over a year that's £4,800 instead of £8,400, more than 40% less. Put that £3,600 of interest into annual costs and the calculator's net yield falls from 5.6% to 3.2%. The gross yield stays at 7.2%.

In my experience, finance is where a lot of a deal's profit goes: interest, arrangement fees, broker fees. And for me, the rent always has to cover every cost.

Tax changes the picture again. Rental profit is taxed, and HMRC's guide to working out your rental income sets out which costs count and how mortgage interest is treated. How that applies to you is one for an accountant.

Rental yield vs total return

Yield is only the income half of the picture. The other half is property capital growth, the change in the property's value while you own it.

Take one year. If the gross yield was 5% and the property's value went up 3% on what you paid, that's a total return of 8% before costs.

I've always bought for income first and never chased capital growth. When I think about my own portfolio, I think in terms of a combined return of about 10% a year, capital growth plus rental yield. That's just how I look at it. Everyone's numbers are different.

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