Free rental yield calculator
The rental yield calculator enables you to calculate the gross and net rental yields for any specific property or your entire portfolio in your lettings business.
Rental Yield Calculator
Table of Contents
What is rental yield?
Rental yield represents the annual rental income as a percentage of the property value.
Why do I need to calculate rental yield?
Understanding a property’s rental yield is important to evaluating its potential as an investment. It provides valuable insights into the property’s financial performance and helps investors make informed decisions.
By analysing the rental yield, investors can determine whether the property is a suitable investment opportunity.
Calculating your rental yield can help determine if your property is a good investment, especially if you’re considering a buy-to-let mortgage. It provides valuable insights into the potential returns your property can generate. Understanding your rental yield is crucial for making informed decisions about your property investments.
What rental yield makes a good buy-to-let investment?
Rental yield is not the only consideration when it comes to choosing a good property investment, but it can help when comparing properties within your shortlist.
Good rental yields in London are currently around 4 to 6%.
How to Use The Rental Yield Calculator?
If your properties are in the UK and you’re calculating rental yield in UK currency, this tool can help. For properties in other currencies, you can follow these steps to work out the rental yield yourself:
- When deciding whether to calculate rental yield based on property purchase cost or current property value, choose the appropriate option from the drop-down menu in the calculator.
- If calculating based on the property’s current value, input the property value into the form.
- Enter the monthly rent amount next. If you know your annual costs total, input it into the calculator, or use the plus button to add individual costs like council tax and insurance.
- Click the calculate button to see your rental yield percentage.
Who can use The Rental Yield Calculator?
The rental yield calculator is a valuable tool for individuals interested in calculating the rental yield for a property they own or plan to purchase.
It is particularly beneficial for:
- buy-to-let landlords,
- new landlords, and letting agents.
Whether you are a seasoned investor or new to the real estate market, this calculator can provide valuable insights into the potential returns on your property investment.
How to Work out Rental Yield?
When calculating your property’s rental yield, simply divide your annual rental income by the property value and then multiply by 100 to determine your yield percentage.
For an accurate yield calculation, it’s important to exclude any regular expenses related to property maintenance from your annual rental income.
Estimating can be challenging when figuring out the rental yield for a property you don’t own yet or one without tenants. You may not have set rent or property expense figures. Remember that the accuracy of your rental yield calculation relies on the numbers you input.
The easiest way to calculate rental yield
Without a doubt, the easiest way to calculate rental yield is to get an accountant to do it!
You will achieve a NET rental yield which takes into consideration all expenses.
What is the difference between gross and net yield?
When renting out a property, the total rental income received from the tenant is known as “gross yield.” This amount is then adjusted for various costs such as fees, commissions, rates, repairs, and running costs to calculate the “net yield,” which is the final yield considered for the investment. Calculating the net yield provides a more accurate representation of the actual return on the investment property.
What is a good rental yield in UK?
A rental yield of 5% – 8% is often considered good because it accurately calculates all costs associated with purchasing and maintaining the property, including mortgage costs, service charges, and maintenance fees.
What are other cost to consider when calculating true rental yield?
When renting out a property, it’s important to consider various costs, such as:
- stamp duty for properties that have not yet been purchased,
- maintenance fees,
- periods of vacancy when the property is unoccupied,
- fees for agents, ground rent for leasehold properties,
- and insurance premiums.
Each of these factors plays a role in the overall expenses associated with letting out a property. It’s crucial to account for these costs to ensure a smooth experience as a property owner.
How do you sell a house with low yield?
Here at Property Saviour, you can sell quickly and confidently. We will buy any house, saving you the uncertainty of auctioning a house or selling via an estate agent.
We will offer you cash, complete the purchase in 10 days or at your preferred time, cover £1,500 of your legal fees, and kindly request a positive review upon completion.
Many sellers have shared their positive reviews and success stories with us. Would you like to be our next success story?
Sell with certainty & speed
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
