Rental Yield Calculator — Gross, Net & Cash-on-Cash for US, UK, Australia & Canada 2026
You found a property generating $2,200/month in rent on a $400,000 purchase price. The agent calls it a 6.6% yield. But after property tax, insurance, management fees, maintenance, and a 5% vacancy allowance, the number that hits your bank account is closer to 4.1%. That gap — gross vs net — is where most property investments either work or fall apart. This calculator shows you all four yield metrics simultaneously: gross yield, net yield, cash-on-cash return, and cap rate, for investors across the US, UK, Australia, and Canada.
A rental yield calculator measures annual rental income as a percentage of a property’s value. Gross yield ignores expenses; net yield deducts all running costs; cash-on-cash compares income to actual cash invested; cap rate measures property income independent of financing.
Rental Yield Calculator
Gross · Net · Cap Rate · Cash-on-Cash · Stamp Duty — US, UK, AUS, CAN
Enter property value and rent to see yield metrics
Gross Yield vs Net Yield vs Cash-on-Cash — Which Number Matters?
Gross Rental Yield
Gross yield is the starting point — fast to calculate, useful for initial screening, but misleading as a final decision metric.
Formula:
Gross Yield = (Annual Rent / Property Value) × 100
Example: $2,200/month rent on a $400,000 property
Annual rent: $2,200 × 12 = $26,400
Gross Yield: $26,400 / $400,000 × 100 = 6.6%
Use gross yield to quickly filter properties — if the gross number is below 4% in a high-cost market, net yield will likely be negative. But never make a purchase decision based on gross yield alone.
Net Rental Yield
Net yield is what you actually earn. It deducts every cost of owning and operating the property from rental income before calculating the return.
Formula:
Net Yield = ((Annual Rent - Annual Expenses) / Property Value) × 100
Annual expenses include: property tax, landlord insurance, maintenance and repairs, property management fees, vacancy loss, strata/HOA fees, and other operating costs.
Same example with expenses:
Annual rent: $26,400
Property tax: −$3,500
Insurance: −$1,200
Maintenance: −$1,500
Management (8%): −$2,112
Vacancy (5%): −$1,320
Total expenses: −$9,632
Net income: $16,768
Net Yield: $16,768 / $400,000 × 100 = 4.19%
The difference between 6.6% gross and 4.19% net represents real money — in this case, $9,632/year that investors who rely on gross yield often fail to budget for.
Cash-on-Cash Return
Cash-on-cash (CoC) measures the return on your actual cash invested — the down payment plus acquisition costs. This is the metric that matters most for leveraged investors using a mortgage.
Formula:
Cash-on-Cash = (Annual Net Income after mortgage / Cash Invested) × 100
Example with financing:
Purchase price: $400,000
Down payment (25%): $100,000
Annual mortgage: $18,000
Net income before mortgage: $16,768
Net income after mortgage: −$1,232
Cash-on-Cash: −$1,232 / $100,000 × 100 = −1.23%
This property looks attractive at 6.6% gross and acceptable at 4.19% net — but with a mortgage at current rates, it generates negative cash flow. Cash-on-cash reveals what gross and net alone cannot: whether the property is self-funding under your specific financing conditions.
The calculator’s Financing section (Down Payment + Annual Mortgage Payment) is optional — leave it blank for a cash purchase calculation, fill it in for leveraged investment analysis.
Cap Rate
Cap rate (capitalisation rate) measures a property’s income independent of how it’s financed. It removes the mortgage variable, making it the standard metric for comparing properties across different financing structures.
Formula:
Cap Rate = (Net Operating Income / Property Value) × 100
Net Operating Income (NOI) = Annual rent minus operating expenses, but before mortgage payments. Cap rate is identical to net yield when calculated on a cash purchase.
Use cap rate to: Compare properties regardless of how you plan to finance them. A property with a 5.2% cap rate is directly comparable to another 5.2% cap rate property, even if one is bought with cash and the other with a 70% mortgage.
How to Use This Rental Yield Calculator
Country Selection
Select US, UK, AUS, or CAN. The country selection changes the currency display and contextualises the yield benchmarks shown in your results. The calculation methodology is identical across all four markets — only the benchmark comparison adjusts.
Property Details
Property Value / Purchase Price: Enter the full purchase price including acquisition costs where relevant. In Australia and the UK, including stamp duty in your total cost gives a more accurate yield — if you paid $400,000 for the property but $16,000 in stamp duty, your true cost base is $416,000 and your actual yield is lower than it appears.
Monthly Rent: Enter your current or expected monthly rent. For vacant properties, use the market rent for comparable properties in the area — check local listing platforms for recent comparables.
Vacancy Rate: The slider defaults to 5% — the industry average for well-managed properties in strong rental markets. Adjust based on your local market:
- Tight urban markets (low vacancy): 2–3%
- Average suburban markets: 4–6%
- Regional or high-turnover properties: 7–10%
Vacancy applies to all rental income — a 5% vacancy rate means you account for approximately 18 days per year where the property is unoccupied or between tenants.
Annual Expenses — What to Include
Property Tax: Your annual local government rate or council tax. In the US, enter your county’s annual property tax. In Australia, enter council rates plus land tax if applicable. In the UK, council tax is typically a tenant responsibility, but landlord contributions vary.
Insurance: Landlord/building insurance. Standard landlord insurance covers building structure, landlord liability, and often loss of rent. Contents insurance is typically the tenant’s responsibility. Budget $800–$2,000/year for most residential properties depending on size and location.
Maintenance & Repairs: The most underestimated expense. The 1% rule — budget 1% of property value annually — is a reliable starting point. On a $400,000 property, that’s $4,000/year. Older properties, those with pools, and those in harsh climates warrant 1.5–2%.
Property Management: Enter your management fee. Property managers typically charge 7–12% of collected rent. In Australia, this commonly runs 8–10%. In the UK, 10–15%. In the US, 8–12%. Full-service management including maintenance coordination, tenant finding, and compliance sits at the higher end.
HOA / Strata Fees: In the US, enter monthly HOA fees × 12. In Australia, enter annual strata levies (including both administrative and sinking fund levies). In the UK, enter annual service charges for leasehold properties. These fees vary enormously — from $600/year for a basic body corporate to $8,000+/year for premium apartment complexes.
Other Expenses: Include letting agent fees for finding new tenants (separate from ongoing management), landlord registration costs where applicable, accounting fees, and any other recurring property-related costs.
Financing (Optional — For Cash-on-Cash)
Leave blank if you’re buying with cash — the calculator will show gross yield, net yield, and cap rate only.
Enter your down payment and annual mortgage payment to unlock the cash-on-cash return metric. Annual mortgage payment = your monthly P&I payment × 12. Do not include property tax or insurance in the mortgage figure if they’re already entered in the expenses section above.
Understanding Your Results
Yield Benchmarks Panel
The results show three benchmark lines:
- Good yield: 5–8% (general target for most markets)
- Average market yield: 4–6%
- Your gross yield: Your calculated result
The colour-coded verdict (Excellent / Good / Average / Below Average) contextualises your result against market standards. A 5% gross yield in inner Sydney is considered strong given that market’s capital growth potential. The same 5% in a remote regional town may be inadequate once vacancy risk is factored in.
Monthly Cash Flow Breakdown
The right panel shows exactly where your income goes monthly:
- Gross rental income
- Vacancy loss (negative)
- Annual expenses converted to monthly (negative)
- Net monthly cash flow
- Annual net income
This breakdown reveals your real monthly position — not the gross rent figure that tends to dominate listing discussions.
What Is a Good Rental Yield? By Country
United States — Targeting 6–10%+ Net
The US rental market is highly localised. National averages are less meaningful than metropolitan and neighbourhood-level benchmarks.
General US benchmarks (gross yield):
| Market Type | Target Gross Yield | Typical Net Yield |
|---|---|---|
| High-appreciation metros (NYC, SF, LA) | 3–5% | 1.5–3% |
| Mid-tier cities (Atlanta, Phoenix, Dallas) | 6–9% | 4–6% |
| High-yield markets (Cleveland, Detroit, Memphis) | 9–14% | 6–10% |
| Rural / small markets | 10%+ | 6–9% |
Most US investors target a minimum 1% monthly rent-to-price ratio — a $300,000 property should generate at least $3,000/month in rent. This translates to a 12% gross yield, which is high but achievable in specific markets.
For cash-flow-positive investment with a mortgage at current rates (6.5–7%), a gross yield of at least 8–10% is generally required to cover PITI and generate positive monthly cash flow.
United Kingdom — 5–8% Gross for Buy-to-Let
The UK residential investment market uses the term buy-to-let (BTL). The national average gross yield in 2026 sits at approximately 5.96% based on average rents and house prices.
UK benchmarks by strategy (gross yield):
| Property Type | Typical Gross Yield | Key Locations |
|---|---|---|
| Standard buy-to-let | 5–6% | Regional cities, commuter belts |
| HMO (House in Multiple Occupation) | 9–15% | University cities, Northern England |
| Holiday let | Variable 8–15% | Coastal, rural, tourist areas |
| London (prime) | 3–4% | Capital growth focused |
| North East / North West | 6–9% | Hull, Sunderland, Liverpool |
Net yield is typically 1.5–3 percentage points below gross in the UK once management fees (10–15%), void periods, maintenance, and mortgage interest are deducted.
The mortgage rate threshold: In 2026, buy-to-let mortgage rates sit in the 4.5–5.5% range. As a rule of thumb: at a 5% mortgage rate, a gross yield of at least 6.5–7% is needed to cover the mortgage and running costs. Properties below this threshold produce negative cash flow unless held for capital appreciation.
Stamp Duty Land Tax (SDLT) impact: UK investors purchasing additional properties pay a 3% surcharge on SDLT. On a £300,000 property, this adds approximately £11,500 to acquisition costs — reducing your true yield when calculated on total cost. Include this in your Property Value figure for an accurate yield calculation.
Australia — 4–6% Gross in Major Cities
Australia’s rental market in 2026 is characterised by record-low vacancy rates (national average approximately 1.1%) supporting strong rental demand, but high property values — particularly in Sydney and Melbourne — compressing gross yields.
Australian benchmarks by city (gross yield, 2026):
| City | Houses | Units |
|---|---|---|
| Sydney | 2.6–3.5% | 3.9–4.5% |
| Melbourne | 2.95–3.5% | 4.4–5.5% |
| Brisbane | 4–5% | 5–6% |
| Perth | 4.5–5.5% | 5.5–7% |
| Adelaide | 4.5–5% | 5–6% |
| Darwin | 6–7.5% | 7–8% |
| Regional markets | 5–8%+ | varies |
Net yield in Australia is typically 1.5–2.5% below gross once council rates, strata levies, insurance, management fees (8–10%), and maintenance are deducted.
The Sydney/Melbourne trade-off: These markets offer gross yields of 2.5–4% — below what’s needed for cash flow — but have historically delivered strong capital appreciation. Investors here typically accept negative cash flow (negative gearing) in exchange for long-term asset growth.
Strata levies are a critical expense in Australian apartments, often underestimated. Admin fund levies cover day-to-day building maintenance; sinking fund levies cover major capital works. Combined, strata costs of $3,000–$12,000/year are common for medium to large complexes.
Canada — 3.5–6% Gross in Major Cities
Canada’s major urban markets — particularly Toronto and Vancouver — face similar dynamics to Sydney and Melbourne: high property values compressing yields, strong tenant demand, and an investment culture that has historically favoured capital growth over cash flow.
Canadian benchmarks (gross yield, 2026):
| Market | Typical Gross Yield |
|---|---|
| Toronto | 3–4.5% |
| Vancouver | 2.5–4% |
| Calgary | 4.5–6% |
| Edmonton | 5–7% |
| Montreal | 4–6% |
| Smaller markets | 6–9% |
Provincial landlord-tenant legislation varies significantly and affects vacancy risk and cost structures — Ontario’s strict tenant protections, for example, extend vacancy periods and can increase costs for landlords compared to provinces with more flexible legislation.
UK Rental Yield Guide — Buy-to-Let, HMO & Holiday Let
Buy-to-Let (BTL)
Standard buy-to-let — one household, one tenancy — is the most common entry point for UK landlords. Gross yields typically sit at 5–6% nationally, with stronger returns in Northern cities and weaker returns in London and the South East.
Key BTL cost considerations for net yield calculation:
- Letting agent fees: 10–15% of rent (full management)
- Landlord insurance: £200–£600/year
- Void periods: budget 4–6 weeks/year (7–12%)
- Maintenance: 0.5–1% of property value annually
- Mortgage interest: at current rates, often the largest cost
HMO — Higher Yield, Higher Complexity
Houses in Multiple Occupation (HMOs) rent individual rooms to separate tenants, significantly increasing rental income per property. In 2026, well-run HMOs in Northern and Midlands university cities deliver gross yields of 9–15%.
Example: A £280,000–£360,000 property in Leeds or Nottingham with 6 rooms at £500–£625/room/month generates £36,000–£45,000 annual rental income — gross yields of 10–14%.
The higher yield comes with higher complexity:
- Mandatory HMO licensing (additional properties requiring licence in England)
- Higher management costs (more tenants = more admin)
- Utility bills often paid by landlord
- Higher maintenance and regulatory compliance costs
Net yield on HMOs is typically 2–4 percentage points below gross once full costs are accounted for.
Holiday Let
UK holiday lets can deliver strong gross yields — 8–15% in popular tourist areas — but with significantly more variability and cost than standard BTL.
Holiday let specific costs not present in BTL: platform fees (Airbnb/Booking.com: 15–20%), cleaning between guests, furnishing and replacement, utilities paid by owner, higher insurance premiums, and seasonal void periods.
Important: Holiday lets are treated differently from standard BTL for UK tax purposes. They can qualify as Furnished Holiday Lettings (FHL) if specific criteria are met — providing access to capital allowances and mortgage interest deductibility that standard BTL has largely lost. Seek specialist tax advice before entering this sector.
Australia Rental Yield — Strata, Vacancy & Regional Considerations
Units vs Houses — The Yield Trade-off
Australian units consistently deliver higher gross yields than houses because purchase prices are lower relative to achievable rents. However, units carry strata costs that houses avoid.
Key difference at the net yield level: A Melbourne house at 3.5% gross with no strata and minimal body corporate fees may deliver a similar net yield to a Melbourne unit at 5% gross once strata levies of $5,000–$10,000/year are deducted.
Always include strata fees — both administrative and sinking fund levies — in your net yield calculation for Australian units.
Vacancy Rates — State by State
Australia’s national vacancy rate in early 2026 sits near record lows at approximately 1.1%. However, state variation is significant:
- Perth & Darwin: Extremely tight, 0.5–0.8% vacancy — near full occupancy
- Brisbane & Adelaide: Tight, 0.8–1.2% — strong demand
- Sydney & Melbourne: Tight but easing, 1.2–1.8% — improving post-pandemic
- Regional markets: Varies widely — some mining towns have volatile demand
For the calculator’s vacancy rate slider, most Australian metro properties in 2026 can reasonably use 2–3% given current market tightness.
Regional vs Capital City — The Yield/Growth Trade-off
Regional Australian markets consistently offer higher gross yields than capital cities — often 5–8%+ compared to 3–4% in Sydney and Melbourne. The trade-off is lower capital growth potential and higher vacancy risk if local economic conditions change.
How to Calculate Rental Yield — Formulas
Gross Rental Yield Formula
Gross Yield (%) = (Annual Rental Income / Property Value) × 100
Where:
Annual Rental Income = Monthly Rent × 12
Net Rental Yield Formula
Net Yield (%) = ((Annual Rental Income − Annual Expenses) / Property Value) × 100
Where Annual Expenses include:
+ Property tax / council rates
+ Landlord insurance
+ Maintenance & repairs
+ Property management fees
+ Vacancy allowance (Gross Rent × Vacancy Rate %)
+ Strata / HOA fees
+ Other operating costs
Cash-on-Cash Return Formula
Cash-on-Cash (%) = (Annual Net Cash Flow / Total Cash Invested) × 100
Where:
Annual Net Cash Flow = Net Income − Annual Mortgage Payments
Total Cash Invested = Down Payment + Acquisition Costs
How to Calculate Property Value From Rental Yield
If you know the yield you want to achieve and the rent a property generates, you can reverse-calculate the maximum price to pay:
Maximum Property Value = Annual Rent / (Target Yield / 100)
Example: Target 5% gross yield, property rents for $1,800/month
Annual rent: $1,800 × 12 = $21,600
Maximum price: $21,600 / 0.05 = $432,000
If the asking price exceeds $432,000, the property will not achieve your 5% target yield. This reverse calculation is useful for setting a maximum bid before entering negotiations.
Frequently Asked Questions
What is a good rental yield?
It depends on your market and strategy. In Australia, 4–6% gross is considered good for capital city properties; 6%+ is strong. In the UK, 5–8% gross is the general target for buy-to-let, with 9%+ achievable through HMOs. In the US, the target varies by market — 6–9% in mid-tier cities, 9–14% in high-yield markets. In all markets, net yield is more meaningful than gross — a good net yield after all expenses is typically 3.5–5%+ in competitive metro markets.
What is the difference between gross and net rental yield?
Gross yield divides annual rent by property value — it ignores all expenses. Net yield deducts operating expenses (tax, insurance, maintenance, management, vacancy) from rent before dividing. The difference is typically 1.5–3 percentage points. A property showing 7% gross may yield only 4–4.5% net. Always use net yield for investment decisions.
How do I calculate rental yield in Australia?
Gross yield: (Annual rent / Property value) × 100. Net yield: ((Annual rent − council rates − strata − insurance − maintenance − management fees) / Property value) × 100. In Australia, include stamp duty in your property value for a true yield on total acquisition cost. For most capital city units, add strata levies as a significant expense that gross yield calculations ignore.
How do I calculate rental yield in the UK?
The formula is identical: (Annual rent / Property value) × 100 for gross. For net yield, deduct: landlord insurance, maintenance, letting agent fees (10–15%), void periods (typically 4–6 weeks budgeted), and council tax if covered by landlord. For a true yield figure, add Stamp Duty Land Tax (including the 3% additional dwelling surcharge) to your purchase price before calculating.
What is cash-on-cash return and how is it different from yield?
Rental yield measures income against total property value. Cash-on-cash measures income against the cash you actually invested — typically your down payment plus closing costs. If you finance 75% of a $400,000 property, your cash invested is approximately $100,000. Even if net yield on the property is 4.5%, negative cash flow after mortgage payments can produce a negative cash-on-cash return. This metric reveals whether a leveraged investment actually puts money in your pocket monthly.
What is cap rate and when do I use it?
Cap rate equals net operating income divided by property value — it excludes financing costs entirely. Use cap rate to compare properties across different financing structures, or to assess a property’s income performance independent of how you’ll fund it. Cap rate is standard in commercial real estate but equally useful for residential investor comparisons. A cap rate of 5% means the property generates 5 cents of net income per dollar of value, regardless of whether you paid cash or borrowed 80%.
Why is vacancy rate important in rental yield calculations?
Vacancy reduces your effective annual income even if your tenants are reliable. A 5% vacancy rate accounts for approximately 18 days per year when the property is between tenants, being cleaned, or undergoing maintenance. On $26,400 annual gross rent, 5% vacancy costs $1,320/year — equivalent to reducing your gross yield by 0.33 percentage points on a $400,000 property. In tight markets (Australia 2026, many US cities), using 2–3% is reasonable. In more volatile markets, 8–10% is prudent.
Should I include mortgage payments in my rental yield calculation?
Not in gross or net yield calculations — these measure property performance independent of financing. Include mortgage payments only when calculating cash-on-cash return, which measures the return on your specific capital investment under your specific financing terms. Separating these metrics allows you to compare the property’s inherent performance (yield/cap rate) against your personal investment return (cash-on-cash).
Data Source:
Rental yield calculations use the standard gross yield formula (Annual Rent ÷ Property Value × 100) and net yield formula ((Annual Rent − Annual Expenses) ÷ Property Value × 100) as published by the Royal Institution of Chartered Surveyors (RICS) valuation standards. Cash-on-cash return formula (Annual Pre-Tax Cash Flow ÷ Total Cash Invested) follows the CCIM Institute’s investment property analysis methodology.
Market-specific benchmarks:
US: Average gross rental yield data from ATTOM Data Solutions Q1 2026 U.S. Single-Family Rental Market report (average 7.9% gross yield nationally).
UK: Average gross yield benchmarks from Hamptons Lettings Index 2026 and ONS private rental price data.
Australia: Yield benchmarks from CoreLogic Australia Property Pulse Q1 2026 (national average 4.0% gross).
Canada: Canadian Real Estate Association (CREA) and Canada Mortgage and Housing Corporation (CMHC) 2026 rental market reports. Currency rates are for display purposes only and do not constitute financial advice. Results are estimates for informational purposes — consult a qualified financial advisor or property professional before making investment decisions
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