Rental Yield Calculator
Calculate gross rental yield, net rental yield, monthly net cash flow, and cash-on-cash return for buy-to-let property investments.
Property Purchase & Rental Income
Mortgage Financing (Buy-to-Let)
Operating Costs & Vacancy Reserves
Yield & Cash Flow Summary
Investment Assessment
This property generates a healthy 5.17% Net Yield with a Debt Service Coverage Ratio (DSCR) of 1.31x, comfortably meeting standard commercial lender stress tests (1.25x). Positive monthly cash flow ($269.75) provides a safety buffer against unexpected tenant turnover or emergency structural maintenance.
About this tool
How to use it
- Enter the property purchase price, estimated monthly rental income, and upfront closing or refurbishment expenses.
- Specify your buy-to-let mortgage parameters (down payment %, interest rate APR, and interest-only vs 25-year repayment schedule).
- Enter your ongoing operating expenses, including property management fees, maintenance reserves, annual property taxes, insurance, and vacancy void weeks.
- Click 'Calculate Rental Yield' to view your Gross Yield, Net Yield (NOI), Cash-on-Cash Return, and monthly net cash flow in hand.
Why it matters
Real estate listings advertise gross rental yield, which ignores property taxes, agency commissions, repairs, and mortgage financing costs. Calculating your true net yield and cash-on-cash return protects property investors from purchasing cash-flow negative liabilities masquerading as high-yield assets.
When to use it
Use this calculator when evaluating potential buy-to-let property listings on Zillow or Rightmove, comparing rental yields across different cities or postcodes, or stress-testing mortgage rate increases on existing property portfolios.
Good to know
Calculations evaluate standard residential buy-to-let property metrics. Gross Yield = (Gross Annual Rent / Purchase Price). Net Yield = (Net Operating Income / Total Capital Invested). Debt Service Coverage Ratio (DSCR) measures the ability of rental income to cover monthly debt payments.
Common questions
What is the difference between Gross Yield and Net Yield?
Gross yield compares annual rental income to the purchase price with zero expense deductions. Net yield subtracts all real operational expenses—including property management fees, maintenance reserves, property taxes, insurance, and vacancy periods—showing your genuine operational return on investment.
What is a good rental yield for a buy-to-let property?
In most mature property markets, a gross yield of 7% to 9% or a net yield of 5% to 6% is considered strong for residential properties. High-density urban apartments often have lower yields (4%–6% gross) but higher capital appreciation, while HMOs (Houses in Multiple Occupation) can achieve 10% to 12% gross yields.
What is Cash-on-Cash Return?
Cash-on-cash return measures the annual net pre-tax cash flow you actually pocket divided by the total initial cash out of pocket (your down payment plus closing costs and renovation expenses). It reflects the financial return on your personal liquid equity.
What is the Debt Service Coverage Ratio (DSCR)?
DSCR is Net Operating Income (NOI) divided by your total annual mortgage debt payments. Most buy-to-let mortgage lenders require a DSCR of at least 1.25x (meaning rental profits exceed the mortgage payment by at least 25%) before approving finance.
How many weeks of vacancy should I budget for?
A prudent rule of thumb for buy-to-let investors is budgeting 3 to 4 weeks of vacancy (void periods) each year to account for tenant transitions, professional cleaning, and listing marketing.