Work out the gross and net rental yield of an investment property from its price, weekly rent and yearly running costs.
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Key facts
- Gross rental yield is the yearly rent as a percentage of the property price.
- Net rental yield subtracts running costs such as council rates, strata, insurance, property management and repairs.
- Example: $650 a week on a $750,000 property is a gross yield of 4.51%; with $7,500 of yearly costs, a net yield of 3.51%.
- Loan interest isn't a running cost for yield; compare the yield with your interest rate instead.
Gross yield by weekly rent and price
| Rent a week | $400,000 | $600,000 | $800,000 | $1,000,000 | $1,500,000 |
|---|---|---|---|---|---|
| $400 | 5.20% | 3.47% | 2.60% | 2.08% | 1.39% |
| $500 | 6.50% | 4.33% | 3.25% | 2.60% | 1.73% |
| $600 | 7.80% | 5.20% | 3.90% | 3.12% | 2.08% |
| $700 | 9.10% | 6.07% | 4.55% | 3.64% | 2.43% |
| $800 | 10.40% | 6.93% | 5.20% | 4.16% | 2.77% |
| $1,000 | 13.00% | 8.67% | 6.50% | 5.20% | 3.47% |
Common questions
How do you calculate rental yield?
Gross yield = yearly rent ÷ property price × 100. Net yield takes the yearly running costs off the rent first.
What is a good rental yield in Australia?
There's no official benchmark. Compare a property's net yield with your loan interest rate: if the yield is lower, the property is negatively geared before tax.
Should I use weekly rent × 52?
Yes for gross yield. For a more realistic figure, allow for vacancy (for example 50 weeks) and include costs to get the net yield.
See also the negative gearing calculator and the stamp duty calculator.
Source for deductible rental costs: ATO, rental expenses. General information, not financial advice.