Estimate a rental yield from your own figures

Enter a purchase price, expected yearly rent and yearly running costs. This is a simple illustration before taxes, finance costs, occupancy changes and repairs.

Enter your own figures to see an estimate.

Client data, date to confirm. Client-supplied growth and ROI examples are undated and unverified; none is used as a default in this tool. The result uses only your entries and is not a forecast or investment advice.

What does rental yield tell you?

Rental yield is a way to compare rental income with the cost of acquiring a property. A simple gross yield calculation uses annual rent divided by the purchase price, then multiplies the result by 100. It is a starting point, not the amount an owner takes home.

Two calculations can produce different results because they may use different purchase costs, rent assumptions, occupancy periods or definitions of income. Before comparing a headline figure, ask what is included and when the underlying information was collected.

Rental returns, tax and financing depend on individual circumstances and current rules. Speak to qualified property, tax and financial professionals before investing; this guide is not advice.

Which costs belong in a realistic estimate?

Start with the acquisition cost you are actually comparing, rather than assuming the advertised property price is the whole investment. Then list the recurring expenses that apply to the property and its rental model. The source material identifies community charges, property insurance, utilities, maintenance, cleaning and management as potential cost categories. Which ones apply, and how much they cost, needs to be checked for the specific property.

If you use a booking platform or a management company, establish the fee basis and what service it covers. Separate one-off setup or furnishing costs from recurring operating costs. If you use finance, model borrowing costs separately and make the assumptions explicit.

How should you allow for unoccupied periods?

A property may not be let every day. Consider how seasonality, changeovers, repairs and the time needed to find tenants affect the number of paid rental days. For a short-term model, test more than one occupancy assumption. For a longer tenancy, consider gaps between agreements and any periods when the property cannot be occupied.

Use evidence that matches the location, property type and rental period you are assessing. A figure from another town, a different size of home or a different season may not be a sound comparison. Ask where an advertised nightly rate or monthly rent came from and whether it reflects actual bookings or an asking price.

What should you check before trusting an ROI figure?

Ask for the calculation inputs, date, source and definition of 'return'. Find out whether the figure is gross or net, whether it includes purchase costs, ongoing expenses, vacancy, financing and tax, and whether it assumes a particular licence or operating arrangement. If those details are missing, the percentage is not enough to support a decision.

Build a cautious case as well as an optimistic one. Change one assumption at a time and see how the result moves. A calculator can organise assumptions; it cannot verify them or predict future income. Have an accountant or tax adviser review the treatment of income and expenses that applies to you.