- Osome UK
- Rental Yield Calculator
Rental Yield Calculator
Calculate your rental yield percentage effortlessly with our tool to maximise your property investment returns in the UK.
Enter the property price and monthly rent to calculate the gross yield
This optional field is used to calculate the net yield
How does the rental yield calculator work?
The calculator simplifies determining rental yield by allowing you to input a property’s purchase price and monthly rental income, evaluating the annual rental income and rental yield percentage. It includes fields for additional costs like property management fees, maintenance expenses, and vacancy rates, offering a comprehensive view of the property’s financial performance.
How do I calculate rental yield?
To calculate rental yield, you need to determine the annual rental income and the property's purchase price. First, multiply the monthly rental income by 12 to get the annual rental income. Then, divide this annual rental income by the property's purchase price. Finally, multiply the result by 100 to get the rental yield percentage.
For example, if the monthly rental income is £1,000, the annual rental income would be £12,000. If the property was purchased for £200,000, the rental yield would be (£12,000 / £200,000) * 100 = 6%.
Other expenses to consider besides rental yield
Yes, besides rental yield, there are several other costs that can impact the overall profitability and value of a property. These include upfront costs such as:
- Stamp duty
- Valuation fees
- Survey fees
- Legal fees
- Mortgage deposit
- Mortgage fees
- Refurbishment costs
Stamp duty is a tax levied on property purchases, valuation fees cover the cost of assessing the property's market value, survey fees involve a detailed inspection of the property's condition, and legal fees encompass the costs associated with conveyancing and legal documentation. These additional expenses are essential to factor into your financial calculations when evaluating the investment potential of a property.
FAQ
What is rental yield?
Rental yield is a financial metric used to evaluate the profitability of a rental property, calculated as the annual rental income expressed as a percentage of the property's purchase price. It helps investors understand the potential return on investment from renting out the property.
What is the difference between gross and net rental yield?
Gross rental yield is calculated by dividing the annual rental income by the property's purchase price without accounting for any expenses, while net rental yield considers all operational costs such as maintenance, property management fees, and other expenses, providing a more accurate measure of profitability.
What is a good rental yield percentage?
A good rental yield percentage typically ranges between 5% and 8%, depending on factors like location, property type, and market conditions, with higher yields generally indicating better investment potential, but it's essential to balance yield with property appreciation prospects and risk.
Is the rental yield calculator applicable for both residential and commercial properties?
Yes, the rental yield calculator can be used for both residential and commercial properties, helping investors analyse the profitability of various types of rental investments by inputting specific financial details relevant to each property type.
Why is rental yield important for landlords?
Rental yield is crucial for landlords as it provides a clear indication of the return on investment from a rental property, helping them assess profitability, make informed investment decisions, and compare the performance of different properties within their portfolio.
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