What is the difference between gross yield and net yield?

Gross yield is annual rent divided by purchase price, expressed as a percentage. Net yield deducts all running costs - management fees, maintenance, insurance, voids - before dividing by purchase price. Net yield is typically 2-3 percentage points lower than gross yield and is the more accurate measure of actual return.

What rental yield do I need to make a buy-to-let work?

As a rule of thumb, you need a gross yield of at least 5-6% to cover a buy-to-let mortgage at typical BTL rates. Below 4% gross yield is rarely cashflow positive with a mortgage. Most lenders require rent to cover 125-145% of the monthly mortgage interest payment (stress tested at a notional rate of 5.5%+).

Rental Yield Calculator

Calculate gross and net rental yield for any UK buy-to-let property.

Property Details

Property Price (£)

Monthly Rent (£)

Annual Service Charge (£)

Leasehold flats only. Enter 0 if freehold.

Annual Ground Rent (£)

Management Fee (%)

Letting agent fee as % of annual rent. Use 0 if self-managing.

Void Allowance (weeks/year)

Expected weeks per year with no tenant.

Annual Maintenance (£)

Repairs, insurance, and upkeep estimate.

Results

      Gross Yield
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      Net Yield
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Annual Gross Income --

Annual Net Income --

Monthly Net Cashflow --

Net yield deducts: management fees, void periods, service charge, ground rent, and maintenance. It does not include mortgage costs or tax.

Also see: All calculators

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