How to use it
- Enter the purchase price and, if you want them counted, buying costs.
- Enter the monthly rent and the share of the year the property sits empty.
- Enter the management fee and the fixed costs you pay each year.
How it works
Gross yield = monthly rent × 12 ÷ (price + buying costs) × 100. Rent collected = full-year rent × (1 − vacancy). Net income = collected − management fee (a share of collected rent) − yearly costs. Net yield = net income ÷ (price + buying costs) × 100, and the payback time is the cost divided by the net income. If net income is zero or negative, no payback is shown.
Worked example
A property costs 300,000 and lets for 1,500 a month. Full-year rent is 18,000 (6% gross). With 5% vacancy, 17,100 is collected; an 8% fee takes 1,368; costs are 3,000. Net income is 12,732, a net yield of 4.24%, or 1,061 a month.
Tips
- Compare properties on net yield, not gross: the gap shows how heavy the running costs are.
- Taxes on rental income and loan costs are not included; add them to your own estimate.
- To compare price per area across offers, see the price per area calculator.