Gross Rental Yield Calculator
Gross rental yield is the most widely quoted property return metric — it tells you the annual rent as a percentage of the property value before any costs. It is useful for quickly comparing properties or markets, but its limitations are important: it ignores all operating costs, tax, and financing. Use this calculator to get the headline number, then move on to net yield for a more realistic picture.
Why this matters
Gross yield is the starting point for any property comparison. Many investor rules of thumb (such as 'aim for above 6%') are based on gross yield — knowing yours tells you whether a property is even worth analysing further.
Key points
- Gross yield = (annual rent ÷ property value) × 100
- London properties typically achieve 3–5% gross yield; northern cities often offer 6–10%
- A commonly cited minimum target is 6% gross yield for a buy-to-let to be financially viable
- Gross yield ignores costs — net yield is always significantly lower
- Property value should be the purchase price, not the estimated current value
- Rising property values can suppress gross yield even when rents increase
Frequently asked questions
What is a good gross yield for a buy-to-let in the UK?
It depends on location. In London, 4–5% gross yield is common due to high property prices. In cities like Manchester, Liverpool, and Birmingham, landlords often achieve 6–9%. As a rule of thumb, many investors target at least 6% gross yield before investigating net yield and cash flow.
What is the difference between gross yield and net yield?
Gross yield is calculated from rental income alone, before any costs. Net yield deducts operating costs (insurance, maintenance, agent fees) but typically excludes mortgage costs and tax. Net yield gives a more realistic picture of returns.
Does gross yield account for capital growth?
No — gross yield only measures rental income relative to property value. To assess total return including capital growth, use the Property Appreciation + Yield calculator.
Should I use the purchase price or current market value in the calculation?
Use the purchase price when comparing investment opportunities. Use the current market value when assessing whether to hold or sell a property you already own.