Calculate gross and net rental yield for buy-to-let properties, including all running costs.
This calculator provides estimates for guidance only. It does not constitute financial or investment advice. Rental income and property values can fluctuate. Always consult a qualified financial adviser before making investment decisions.
Rental yield is the most important metric for buy-to-let investors in the UK. It measures the annual return you receive from rental income as a percentage of the property value, giving you a way to compare different investment opportunities and assess whether a property offers a worthwhile return. There are two key measures: gross yield, which considers rental income relative to property value, and net yield, which deducts all running costs to show your actual profit as a percentage. A property might look attractive based on its gross yield, but once you factor in mortgage payments, insurance, maintenance, letting agent fees, void periods, and service charges, the net yield can be considerably lower. This calculator helps you see the full picture by accounting for all common costs associated with buy-to-let ownership. It also adjusts for void periods, which are the weeks each year when the property is unoccupied between tenancies, reducing your effective annual income.
To calculate your rental yield: 1. Enter the property value. Use the current market value or the price you paid (or plan to pay) for the property. 2. Enter the monthly rent. This is the amount you charge or expect to charge tenants per month. 3. Enter annual mortgage payments. If you own the property outright, leave this at zero. Otherwise, enter the total of all mortgage payments made in a year. 4. Enter annual insurance cost. This covers landlord buildings and contents insurance. A typical UK figure is GBP 200 to GBP 500 per year. 5. Enter annual maintenance cost. Budget for repairs, gas safety certificates, electrical checks, and general upkeep. A reasonable estimate is 1-2% of the property value per year. 6. For properties managed by a letting agent, enter the annual management fees. Typical UK fees are 8-15% of rental income plus VAT. 7. For leasehold properties, enter the annual service charge. 8. Set the expected void period in weeks. Most landlords budget for 2-4 weeks per year between tenancies. 9. Review the results. The calculator shows gross yield, net yield, annual income, total expenses, net income, and monthly profit. The pie chart shows how your rental income is divided between costs and profit.
Gross rental yield is the simplest measure: Gross yield = (annual rental income / property value) x 100 However, this does not account for void periods. This calculator adjusts for voids: Effective annual rent = monthly rent x (52 - void weeks) / 52 x 12 This formula pro-rates the monthly rent based on the number of occupied weeks in the year. Gross yield = effective annual rent / property value x 100 Net yield deducts all running costs: Annual expenses = mortgage payments + insurance + maintenance + management fees + service charge Net income = effective annual rent - annual expenses Net yield = net income / property value x 100 Monthly profit = net income / 12 For example, a GBP 200,000 property rented at GBP 850 per month with 2 void weeks: effective annual rent = GBP 850 x 50/52 x 12 = GBP 9,807.69. Gross yield = GBP 9,807.69 / GBP 200,000 x 100 = 4.9%.
Inputs: Property value: GBP 150,000, Monthly rent: GBP 700, No mortgage, Insurance: GBP 250, Maintenance: GBP 400, No management fees, No service charge, Void: 2 weeks
Inputs: Property value: GBP 250,000, Monthly rent: GBP 1,100, Annual mortgage: GBP 9,600, Insurance: GBP 350, Maintenance: GBP 600, Management fees: GBP 1,320, Service charge: GBP 2,400, Void: 3 weeks
This calculator focuses on rental yield as a percentage of property value. It does not calculate return on investment (ROI) based on your cash deposit, capital appreciation, or tax implications. For a full investment analysis, you should also consider income tax on rental profits, capital gains tax on eventual sale, and potential property value changes over time. Since April 2020, UK landlords can no longer deduct mortgage interest from rental income for tax purposes. Instead, they receive a 20% tax credit on mortgage interest. Higher-rate taxpayers are particularly affected. This calculator does not model tax because individual circumstances vary widely. When comparing properties, use net yield rather than gross yield for a realistic comparison. A property with a high gross yield but heavy expenses may deliver less profit than one with a moderate gross yield and low running costs.