A rental yield calculator measures the annual income a property produces as a percentage of its value. Investors use it to rank properties, sense-check agent claims, and decide whether a purchase supports their goals. It says nothing about capital growth, but it shows cash flow strength.
Rental yield is annual rental income divided by property value, shown as a percentage, and it is the fastest way to compare the income return of two investment properties. A house at 3.5% and a unit at 5.0% aren't directly comparable in growth terms, but on income alone the unit clearly wins.
The Hub calculator gives you two versions. Gross rental yield ignores costs. Net rental yield deducts what it costs to hold the property, such as council rates, insurance, property management, maintenance and strata fees. Net yield is the more honest number, and it's the one lenders and accountants care about.
Use the calculator early. Run it on every property you're considering before you pay for a building inspection or spend a weekend at open homes. Filtering on yield first saves time and heartache.
Gross yield equals weekly rent times 52, divided by the purchase price, times 100. Net yield uses the same formula after subtracting yearly costs from the rent. Both take seconds to work out, but the tricky part is estimating realistic costs and vacancy.
Here's the process in the Hub calculator:
You're looking at a $650,000 townhouse renting for $600 a week. Annual rent is $31,200, giving a gross yield of 4.8%. Now add costs: $2,400 council and water, $1,600 insurance, $2,500 management and letting fees, $2,000 maintenance and $3,200 strata. Total costs are $11,700. Net income is $19,500, so net yield is 3.0%.
A townhouse with a 4.8% gross yield can fall to a 3.0% net yield once $11,700 in annual holding costs are counted, which is why net yield is the better measure for cash flow.
Don't forget vacancy. If the property sits empty for two weeks a year, you lose $1,200 more. Build that into your assumptions. It's a small number that surprises a lot of first-time investors.
Rent has to cover interest, rates, insurance and repairs, or you fund the gap yourself. Yield tells you how big that gap is before you sign a contract.
Lenders count a portion of your rental income when they assess new loans. Stronger rent means a healthier serviceability position, all else equal.
Higher yield can cushion you if interest rates rise or a tenant leaves. Lower yield leaves less room.
Some investors chase growth and accept a lower yield. Others want income now. Yield helps you check that a property matches the strategy you've chosen.
| Measure | Formula | What it ignores | Best used for |
|---|---|---|---|
| Gross yield | Annual rent ÷ price × 100 | All holding costs and vacancy | Screening dozens of listings fast |
| Net yield | (Annual rent − costs) ÷ price × 100 | Loan interest and tax | Comparing final shortlisted properties |
| Cash flow (after interest) | Rent − costs − loan repayments | Capital growth and tax effects | Checking whether you can afford to hold |
Gross yield vs net yield: gross is the screening tool and net is the decision tool, and investors who rely on gross yield alone routinely overestimate their return.
Net yield doesn't include your loan, so it stays the same whether you borrow 60% or 90%. To see what the property costs you each month after interest, you need a cash flow view. A broker can build that with your actual loan structure, using the numbers you find in this calculator as the starting point.
There's no single good yield, because it depends on property type, location and your goal. Units often show higher gross yields than houses in the same city, while houses in capital cities often show lower yields with stronger long-term growth potential. Check current suburb data, not a rule of thumb.
We haven't printed a benchmark here because yields move with prices and rents every month, and an outdated figure would mislead you. Instead, use the calculator to set your own minimum. Work backwards: if you need the property to be cash-flow neutral, what net yield do you need at your loan size and rate? Then screen for properties that meet it.
Two rules of thumb help. First, compare like with like: units against units, houses against houses, in the same suburb. Second, check the rental data for the last 12 months, not the last listing.
A good rental yield is one that meets your own cash flow target after costs and interest, not one that beats a national average.
Include every cost you'll pay to keep the property tenanted and in good condition, except loan interest and tax. That covers rates, water, landlord insurance, agent fees, maintenance, strata levies and land tax where it applies. Missing even one of these inflates your net yield.
Interest is treated separately because it depends on how you finance the property. For that, use the LVR calculator to understand your borrowing position, then the True Cost Calculator for the wider picture of what ownership really costs.
The Hub calculator is built by a brokerage that works with investors every day. It gives you a quick yield, then connects to tools that go deeper, including suburb research and portfolio analysis, in one free account. A broker can review your shortlist afterwards.
Investors who analyse yield before they buy tend to choose properties that fit their cash flow, and they avoid paying too much for income that isn't there. One client story from Investors Choice Mortgages shows the result.
Michael T. from Sydney bought his second investment property and achieved a 7.2% yield. He compared options on yield and cash flow before choosing, and he had lending in place ahead of time so he could act when the right property appeared.
Numbers like that depend on the property, the market and the time. They aren't a promise of what you'll achieve. But they show what a disciplined approach to yield can do for an investor who does the sums first.
Multiply weekly rent by 52, divide by the property price and multiply by 100. That's gross yield. For net yield, subtract annual costs from the rent before dividing. A $500,000 property renting at $450 a week has a gross yield of 4.7%.
Gross yield uses rent and price only. Net yield also subtracts costs such as rates, insurance, management fees and maintenance. Net yield is lower but more realistic. Use gross to screen properties and net to decide.
No. Standard gross and net yield ignore loan interest, because interest depends on how you finance the purchase. To see your true monthly position, look at cash flow after interest, which a broker can model for you.
No. A high yield can signal weak growth, poor tenant demand or heavy maintenance costs. A moderate yield in a strong-growth area can beat a high yield in a struggling one. Judge yield alongside growth prospects and risk.
Use a written rental appraisal from a local property manager or the median rent for comparable properties nearby. Avoid the agent's most optimistic figure. Test a lower rent too, in case the property sits vacant for a few weeks.
Gross yield leaves out council rates, water, insurance, property management, repairs, strata levies, land tax and vacancy. Together these often take a full percentage point or more off the return, which is why net yield matters.
Yield itself isn't changed by tax, but your after-tax return can be. The 2026 Budget announced changes to negative gearing and the capital gains tax discount from 1 July 2027. Speak with your accountant about how they apply to your situation, and see MoneySmart for independent property investing guides.
The Hub offers a free account level, so you can start without paying. Some tools and services unlock once you become a client. Create your free account to see what's available.
Yield turns a property's price and rent into a comparison you can trust. Run gross and net yield on every property on your shortlist, then take your best candidates to a broker who can check the finance.
Want a second set of eyes? Call 1800 46 48 10 or email askus@investorschoice.com.au. You can also explore the Buying Costs Calculator or our full set of property calculators.
