Rental Yield Calculator

Rental yield is the annual return your investment property generates from rent, expressed as a percentage of what the property is worth. Think of it like an interest rate on a savings account, but for bricks and mortar. If a property costs $600,000 and earns $30,000 a year in rent, your gross yield is 5%.

There are two types that matter: gross yield and net yield.

Gross rental yield is the simpler figure. It only looks at the rent coming in against the purchase price. It is useful for quickly comparing properties or suburbs, because it strips out the variables that differ from landlord to landlord. When a real estate agent quotes a yield, they almost always mean gross.

Net rental yield is the more honest number. It takes your annual rent and subtracts annual expenses before dividing by the purchase price. Expenses include things like council rates, insurance, water charges, maintenance, strata levies, property management fees, and land tax. Net yield tells you what you are actually earning after the bills are paid.

The gap between gross and net yield can be significant. A property with a gross yield of 5% might have a net yield of only 3% once you account for the real costs of holding a rental property. Knowing both numbers gives you a much clearer picture of whether a property is working for you financially.

The formulas are not complicated. The hard part is making sure you have the right inputs.

Gross rental yield

Take your weekly rent, multiply it by 52 to get your annual rental income, then divide by the property's purchase price. Multiply the result by 100 to express it as a percentage.

For example: $550 per week in rent gives you $28,600 in annual income. Divide that by a purchase price of $650,000 and you get 0.044, or a gross yield of 4.40%.

Net rental yield

Start the same way, but subtract your total annual expenses from the annual rental income before dividing by the purchase price.

The expenses you should include:

• Council rates
• Water rates (landlord portion)
• Building and landlord insurance
• Strata or body corporate levies
• Property management fees (if you use an agent)
• Repairs and maintenance
• Land tax
• Vacancy costs (weeks where the property sits empty between tenants)

Do not include mortgage interest when calculating net yield. Yield measures the return the property itself generates, independent of how you financed it. That said, mortgage interest absolutely matters for your overall cash position, which is a different calculation. Our cash flow calculator handles that side of things.

Using the same example: $28,600 in annual rent minus $8,500 in expenses gives you $20,100 in net income. Divide by the $650,000 purchase price, and your net yield is 3.09%.

This depends on where you buy, what you buy, and what your investment strategy is. But there are useful benchmarks.

Sydney typically has the lowest gross yields of any capital city, averaging around 2.5% to 3.5%. Property prices are high relative to rents, which means you are relying heavily on capital growth to make the numbers work over time.

Melbourne is similar, with gross yields generally in the 3% to 4% range, though certain outer suburbs and apartment markets can push slightly higher.

Brisbane has seen yields around 4% to 5% for houses, with some suburbs delivering higher. Strong population growth has supported both rents and prices.

Perth and Adelaide have been solid performers in recent years, with gross yields of 4% to 5.5% depending on the suburb and property type.

Regional areas can offer yields of 5% to 7% or more, particularly in mining towns and regional centres with tight rental markets. The trade-off is usually higher vacancy risk and less predictable capital growth.

As a rough guide, most property investors consider a gross yield below 3% to be low, 3% to 5% as moderate, and above 5% as strong. But context matters enormously. A 3% gross yield on a well-located Sydney house that appreciates 5% a year may outperform a 6% yield in a regional town where prices are flat.

If you are comparing properties across suburbs or states, keep in mind that expenses vary too. A property with higher council rates, strata levies, or land tax obligations will have a bigger gap between gross and net yield. Always run both numbers before making a decision.

Let's run through a realistic example.

You buy a three-bedroom house in a Brisbane suburb for $680,000. You rent it out for $580 per week.

Gross yield: $580 x 52 = $30,160 annual rent. Divided by $680,000 = 4.44% gross yield.

Now let's add the annual expenses:

• Council rates: $2,100
• Water rates (landlord share): $900
• Building and landlord insurance: $2,200
• Repairs and maintenance: $2,500
• Land tax: $1,400
• Vacancy allowance (2 weeks): $1,160

Total annual expenses: $10,260

Net yield: ($30,160 - $10,260) / $680,000 = 2.93% net yield.

That is a meaningful difference. The gross yield looked healthy at 4.44%, but once you account for the real costs, the return drops to just under 3%. This is typical for many investment properties, and it is exactly why looking at gross yield alone can be misleading.

If you are self-managing the property instead of paying a property manager, you avoid that 7% to 10% management fee, which would add another $2,100 to $3,000 to the expense column. Our savings calculator shows exactly how much that difference adds up to over time.

You can use the calculator above to plug in your own numbers. Try adjusting the weekly rent or purchase price to see how sensitive the yield is to small changes. Even a $20 per week rent increase on this property would push the gross yield from 4.44% to 4.59%.

Yield is one piece of the puzzle, not the whole picture. Plenty of landlords have chased high yields only to end up with properties that barely grew in value, while others accepted low yields on well-located properties that doubled over a decade.

The total return on a property comes from two sources: rental income (yield) and capital growth (the increase in the property's value over time). Most successful property investors in Australia have built their wealth primarily through capital growth, with rental income covering the holding costs along the way.

A property that is negatively geared, meaning expenses exceed rental income, can still be a good investment if capital growth is strong enough. You can check whether your property fits that category with our negative gearing calculator.

Cash flow matters too. A property with a respectable net yield might still leave you out of pocket each month if mortgage repayments are high. The difference between yield and cash flow is that yield ignores your financing, while cash flow accounts for every dollar going in and out. For a full breakdown of what it actually costs to hold a property, read our guide on the cost of owning a rental property in Australia.

There is also the question of risk. Higher yields often correlate with higher risk, whether that is higher vacancy rates, less reliable tenants, or locations where capital growth is uncertain. A 7% yield in a mining town sounds appealing until the mine closes and you cannot find a tenant for months.

The best approach is to understand your yield, then put it in context alongside capital growth expectations, your cash flow position, and your tax deductions. No single number tells the full story.