Calculate gross and net rental yield instantly. Enter purchase price, monthly rent and all annual costs to see whether a property stacks up as an investment — and what yield you need to cover your mortgage.
Rental yield is the most important metric for evaluating a buy-to-let investment. But most landlords and investors cite gross yield — a figure that ignores management fees, void periods, maintenance and insurance. Net yield (after all costs except mortgage) gives a far more honest picture of whether a property generates worthwhile income.
Gross yield = Annual Rent ÷ Purchase Price × 100. A £180,000 property renting at £900/month has a gross yield of 6%. But after management fees (10% = £1,080/year), void periods (3 weeks = £520/year), maintenance (£1,200/year) and insurance (£350/year), net income is £6,650/year — a net yield of 3.7%. This is before mortgage costs. Always evaluate net yield, not gross.
Manchester, Liverpool, Leeds: 6–8% gross. Birmingham, Sheffield: 5.5–7%. London (outer): 4–5.5%. London (inner): 3–4.5%. The South East generally: 4–5.5%. Higher yields in the North compensate for lower capital appreciation expectations; lower London yields are underpinned by stronger long-term price growth.
At a 4.3% buy-to-let mortgage rate on a 75% LTV property, you need approximately 6% gross yield to achieve neutral cash flow (neither positive nor negative after costs). Below 5% gross almost certainly means negative monthly cash flow at current rates. This is why many landlords are exiting — yields that worked at 2% mortgage rates do not stack up at 4.5%.
Gross yield of 5–8% is considered good for UK buy-to-let. Above 8% is excellent but may reflect higher area risk or maintenance requirements. Below 5% is challenging at current mortgage rates. Net yield (after management, maintenance, void periods, insurance) is typically 2–3 percentage points below gross. The minimum net yield for positive cash flow depends on your LTV and mortgage rate.
Gross Yield = (Annual Rent / Purchase Price) × 100. Example: £900/month = £10,800/year on a £180,000 property = 6.0% gross. Net Yield = (Annual Rent - Annual Costs) / Purchase Price × 100. Costs include management fees (typically 8–12% of rent), void periods (typically 3–5 weeks/year), maintenance (1–1.5% of property value), insurance and letting agent fees.
No — rental yield is calculated before mortgage costs, making it comparable across properties regardless of how they are financed. To evaluate actual cash flow, subtract mortgage payments from net income (after all operating costs). A positive monthly cash flow after mortgage is the true test of whether a leveraged buy-to-let investment works.