Property net yield calculation.

Gross yield = annual rent ÷ property price. Net yield = (annual rent - costs) ÷ property price. Property listings always quote gross. Reality check via net: typical 1.5-2.5 percentage point gap between gross and net yield. 15k rent on 250k property = 6% gross. Less 4k costs = 4.4% net. The 1.6% gap is what most rental property comparisons miss.

250,000 property, 15,000 annual rent (gross 6%), 4,000 annual costs (insurance, maintenance, void allowance, management). Net rent 11,000. Net yield 4.4%. Gap 1.6 percentage points = 4,000 hidden in 'gross' headline. Critical to compare net to net across investment opportunities.

Common annual cost categories: 10% management fee (if let agent), 8-12% void allowance (1-1.5 months annually), 1-2% maintenance reserve, building insurance 400-1,200, ground rent/service charge if leasehold, accountant fee. Total typically 25-35% of rent. Net yield always meaningful below gross - never compare investments on gross yield alone.

Run it with sensible defaults

Using property price of 250,000, annual rent of 15,000, annual costs of 4,000, the calculation works out to 4.40%. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Property Price, Annual Rent, and Annual Costs — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

How the math works

Gross yield = rent ÷ price. Net rent = rent - costs. Net yield = net rent ÷ price. Gap = gross - net. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

Where this fits in planning

This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.