Our approach covers calculators for the UK, Australia, Canada and the US. See how local rules shape each method, then follow a UK rental-yield example step by step.
UK rental-yield example · Before costs and tax
Monthly rent becomes annual rent before voids and running costs are deducted. Net yield compares the remaining income with the price, purchase tax and other buying costs. The SDLT estimate covers England and Northern Ireland; Scotland and Wales use the tax amount you enter.
Weekly rent is multiplied by 52, then adjusted for vacancy, letting fees and the annual costs you enter. Net yield compares this income with the price plus stamp duty. The duty calculation uses the selected state or territory's recorded rates and rounding rules.
Rent is reduced by vacancy, operating costs and mortgage payments to estimate cash flow before income tax. The mortgage model converts a nominal annual rate using semi-annual compounding and adds any entered CMHC premium to the loan. Check these assumptions against your lender's quote.
Part-month rent uses your selected actual-month, 365-day-year or 30-day-month method. The occupied dates include the move-in or move-out day. Results compare the methods; they do not decide which one your lease or applicable local rules require.
Illustrative figures, not market data.
Multiply the monthly figure by 12. Void weeks are taken off later, in the net yield.
Monthly rent × 12Divide annual rent by the purchase price and multiply by 100. This is gross yield: the rent before expenses, expressed as a percentage of the price.
Annual rent ÷ Purchase price × 100Remove the rent lost in 2 void weeks, then the letting fee, service charge, insurance and maintenance. What is left is the annual net income.
Annual rent − Void loss − Running costsAdd £20,000 estimated SDLT, including the additional-property surcharge, and £2,500 other buying costs to the price. Then divide the annual net income by that total. This is net yield.
Net income ÷ (Price + SDLT + Other costs) × 100Net yield still leaves out mortgage payments and income tax.
Money inputs use whole pence for GBP and whole cents for AUD, CAD and USD. Intermediate calculations may retain fractions until the relevant rounding step.
The UK SDLT total in this example is rounded down to whole pounds. Other taxes follow the rounding rules stated by their calculator.
Gross and net yield in this UK example are displayed to two decimal places. Other calculators explain their own percentage and ratio display rules.
Higher rates are not applied below a £40,000 purchase price.
The UK rental-yield calculation is tested against official SDLT examples and separate hand-checked yield cases, including threshold boundaries and zero rent. New or changed content requires approval before publication.
