Rental Yield Calculator

It depends on the area and your strategy, but a gross yield of around 5%–8% is often seen as solid for a UK buy-to-let. Higher yields (cheaper areas, the North) usually come with lower capital growth; lower yields (the South East) often come with stronger price growth. Always look at the net yield after costs.

Gross yield is the annual rent as a percentage of the property price, ignoring costs — handy for quickly comparing properties. Net yield deducts running costs (management, insurance, maintenance, voids and mortgage interest) first, so it reflects what you actually earn.

Gross yield = (monthly rent × 12) ÷ property price × 100. For example, £1,200 a month on a £250,000 property is £14,400 ÷ £250,000 = 5.76%. Net yield does the same with the annual profit after costs instead of the full rent.

Cash-on-cash return (ROI) is the annual profit divided by the actual cash you invested — your deposit plus buying costs. On a mortgaged purchase you put in less cash, so even with interest as a cost the percentage return on your money can be higher than the net yield.

Yes. Rental profit is subject to Income Tax. Since the Section 24 changes, individual landlords can no longer deduct mortgage interest as a cost — instead you get a 20% tax credit on it — which can push higher-rate landlords into a bigger bill. This calculator shows the cash position before that tax; speak to an accountant for your tax position.