Rental yield calculator

A property yield calculator allows you to estimate the potential return on investment (ROI) from a rental property. Knowing the rental yield of a particular property will help you understand if it is a good property investment.

Calculating rental yield is vital for successful property investors, landlords and buy-to-let investors, allowing them to make wiser investments that are more likely to generate a return. Real estate agents, brokers and property developers may also use these tools in their work.

There are scenarios when a rental yield calculator can be invaluable, and these usually revolve around making key decisions about a rental property investment.

You might calculate rental yield before purchasing a property to estimate potential returns and compare certain properties before making your final decision. Similarly, if you decide to sell a property, it can be used to help determine a sale price.

While owning a buy-to-let property, you might need to make decisions that could impact your overall profitability. Expenses can change over time due to changes in property taxes, maintenance costs and management fees. If you decide to increase or decrease rent, you can use a calculator to understand how this will affect your yield.

Otherwise, you might want to use a calculator in light of market fluctuations and changes to the value of your property, allowing you to update your rental yield accordingly. Many property investors choose to review their portfolio every six months or year, and a calculator can provide crucial information for these reviews.

Rental yield is not the only consideration when it comes to choosing a good property investment, but it can help when comparing properties within your shortlist. Knowing how to interpret the results of a rental yield calculator will help you draw more meaningful conclusions – and our team can help you with this.

Good rental yields in London are currently around 4 to 6%.

The London lettings market remains strong following a slowdown in the sales market over the past few years. While average rental prices have experienced downward pressure, long-term investment in the London property market still produces healthy total returns. If you have any questions, don't hesitate to contact one of our experts for more information.

Book a valuation with a Foxtons expert for an accurate understanding of your rental yield.

Net yield considers your yearly running costs – and you can include these in our calculator for a more accurate reflection of your ROI. Meanwhile, gross rental yield is the potential return before considering any expenses. Our calculator shows both gross and net yield. If you're considering a buy-to-let, using a rental yield calculator that accounts for all the additional, often hidden costs will give you a more accurate picture, helping you make smarter, more profitable investment decisions.

Examples of the yearly running costs you can input into our calculator include: - Monthly mortgage payment - Repairs and maintenance (per year) - Ground rent (per year) - Insurance (per year) - Utility bills payable by landlord (per year) - Council tax (per year) - Vacancy loss (per year)

You can input details about additional costs to better reflect the output. These include: - Stamp duty - Survey fees - Valuation fees - Legal fees - Mortgage fees - Refurbishment costs

Including these factors helps you calculate both gross rental yield and net rental yield, giving you a more realistic estimate of your investment's profitability.

Due to the ever-changing nature of the property market and rental prices, you should regularly review yields in case adjustments are needed. Many property investors review their properties at least annually for this reason.

Of course, everyone’s reasons for using a property yield calculator vary depending on their circumstances. But since it’s a free tool, you can use it as often as you like.

Vacancy rate refers to the percentage of time a rental remains unoccupied without generating rental income.

When a property or room is vacant, you receive reduced rental income during that time, which lowers your total annual rental income. Consequently, higher vacancy rates mean lower income and a reduced rental yield.

It’s also important to remember that costs not covered by rental income will continue regardless. Examples include mortgage payments and council tax. Being aware of the cash flow impact that prolonged or frequent vacancies can have is crucial to maintaining the overall profitability of your investment. Using our free buy-to-let rental yield calculator can help you stay on top of these risks and plan.

We have a wealth of data to help you make your investment decision.