Property Rental Yield Calculator
Work out the gross yield, net yield, monthly cash flow and cash-on-cash return for a rental property. It is built for quick buy-to-let comparisons, but it also shows the assumptions that can make a cheap-looking deal less attractive once voids, service charges, management fees and mortgage payments are included.
Calculate rental yield and cash flow
Use annual costs where possible. Mortgage payments are shown separately from net yield so the property itself is easier to compare.
Property and rent
Running costs
Finance and cash invested
Used for cash flow, not net yield before finance.
Best first check
gross yield
Good for comparing asking prices and advertised rents quickly.
Better reality check
net yield
Includes expected voids and operating costs before mortgage finance.
Cash pressure
monthly flow
Shows whether the rent covers mortgage and routine running costs.
A rental yield is only useful if you know what it includes
Estate-agent listings often lead with a gross yield because it is quick and flattering: annual rent divided by the purchase price. That is useful for a first scan, but it can hide the dull bits that actually shape a landlord's year: weeks without a tenant, service charge, insurance, safety checks, maintenance and letting agent fees.
This calculator keeps those layers separate. Gross yield tells you how the rent compares with the property value. Net yield before finance tells you whether the property itself produces a sensible return after normal running costs. Cash flow after mortgage payments tells you whether the deal is likely to put money in your bank each month or quietly ask for more.
That distinction matters if you are comparing, say, a cheaper flat with a high rent but a chunky service charge against a small house with fewer fixed costs. The headline yield might favour one; the net cash position might favour the other.
| Measure | Best use |
|---|---|
| Gross yield | Fast comparison of rent against value. |
| Effective rent | Rent after expected void periods. |
| Net yield before finance | Property performance after operating costs. |
| Monthly cash flow | Surplus or shortfall after mortgage payments. |
| Cash-on-cash return | Return on the deposit and upfront cash invested. |
How this rental yield calculator works
Inputs used
- Property value or purchase price.
- Expected monthly rent.
- Expected void weeks per year.
- Management fee percentage and annual running costs.
- Monthly mortgage payment for cash-flow analysis.
- Deposit, buying costs and refurb/furnishing costs for cash-on-cash return.
Calculation method
- Annualise the monthly rent to calculate gross annual rent.
- Adjust annual rent for expected void weeks to estimate effective rent.
- Deduct management fees and other running costs to estimate net operating income.
- Divide gross rent and net operating income by property value to show gross and net yield.
- Deduct mortgage payments to estimate cash flow before tax.
- Compare annual cash flow with cash invested to estimate cash-on-cash return.
Assumptions
- Management fees are calculated as a percentage of effective rent after voids.
- Net yield is shown before mortgage finance so different properties can be compared more fairly.
- Monthly mortgage payment is included in cash flow only.
- Buying costs can include SDLT, Wales LTT, Scotland LBTT, legal fees, survey costs and broker fees.
- Figures are before Income Tax, Corporation Tax, Capital Gains Tax and future rent or house-price changes.
What this does not cover
- It does not calculate landlord Income Tax. See GOV.UK rental income guidance or use a future dedicated landlord tax calculator if added.
- It does not calculate Stamp Duty, Welsh LTT or Scottish LBTT. Use the Stamp Duty Calculator, Wales LTT Calculator or Scotland LBTT Calculator.
- It does not calculate Capital Gains Tax on sale. Use the Capital Gains Tax Calculator for sale/disposal estimates.
- It does not value the property, forecast rent growth, assess mortgage affordability, check licensing rules, or decide whether expenses are allowable for tax.
Worked example: a GBP 250,000 rental flat
Suppose a flat costs GBP 250,000 and rents for GBP 1,200 a month. The gross annual rent is GBP 14,400, so the gross yield is 5.8%. That is the number you often see in a listing or quick spreadsheet.
Now add two void weeks, a 10% management fee, GBP 1,200 maintenance, GBP 450 insurance and safety checks, GBP 900 service charge and GBP 300 of other landlord costs. The net income before finance falls sharply, because those costs come out whether the headline yield looked neat or not.
If the mortgage payment is GBP 750 a month, the calculator then shows whether the deal still has positive monthly cash flow before tax. That is the number that decides whether the property feels calm to own or needs a buffer from your salary.
Costs landlords often forget
Leave room for quiet costs. Insurance, gas and electrical checks, inventories, accountancy, replacement appliances, cleaning between tenants and occasional bad months can turn a comfortable-looking deal into a tight one.
Leasehold properties deserve extra caution. Service charges can rise, major works bills can arrive at the worst time, and ground rent or lease extension issues can affect resale value. Put realistic figures into the service charge and other costs fields rather than hoping they stay flat.
If you are using a mortgage, treat the cash flow result as a stress test. A property can have a positive net yield before finance and still be cash-negative after the mortgage payment.
Common rental yield mistakes
Using gross yield as the whole answer
Gross yield ignores the costs that landlords actually pay. Use it for screening, not for final decisions.
Forgetting voids
Even a good property may sit empty during repairs, tenant changes or slower rental periods.
Treating mortgage capital as a normal cost
Capital repayments affect cash flow, but they are not the same as operating costs or yield before finance.
Ignoring tax and ownership structure
Personal landlords and companies can face different tax treatment, especially around mortgage finance costs.
Rental yield FAQs
What is a good rental yield?
Should I use purchase price or current value?
Does mortgage repayment count as a cost?
Does this calculate landlord tax?
Official sources
Last verified: May 9 2026. Calculations are estimates based on the published rules and assumptions shown on this page.
- GOV.UK renting out your property - rental income, property allowance, allowable expenses and landlord reporting context
- HMRC guidance on working out rental income - rental income, allowances, allowable expenses, capital expenditure and losses
- HMRC Property Income Manual - technical property income guidance for UK and overseas property income
- GOV.UK property and trading income allowances - GBP 1,000 property allowance and when property income must be reported
- GOV.UK rental income record keeping - records landlords should keep for rent, expenses, invoices and bank statements