Buy-to-Let Yield Calculator
Calculate the gross and net rental yield on a buy-to-let property to assess the return on your investment. Net yield accounts for annual costs such as management fees, insurance, and maintenance.
How it's calculated
Gross yield = Annual rent ÷ Property value × 100Net yield = (Annual rent − Annual costs) ÷ Property value × 100
Frequently Asked Questions
- What is a good rental yield in the UK?
- A gross yield of 5–8% is generally considered good for UK buy-to-let. Region changes the picture substantially. Northern cities such as Manchester and Liverpool typically yield more than London, where high purchase prices compress the return even when rents are high. Remember this is the gross figure, before any costs. The net yield is what determines whether the property actually pays for itself.
- What costs should I include in net yield?
- Seven costs eat into gross yield. Letting agent fees run 8–15% of rent. Then landlord insurance, maintenance and repairs, mortgage interest, ground rent and service charges. The one most often forgotten is void periods — typically 3–4 weeks a year with no rent coming in at all. Leave voids out and your net yield will look better on paper than it does in your bank account.
- Do I pay tax on rental income?
- Yes. Rental profit — income minus allowable expenses — is subject to income tax at your normal rate. One rule catches many landlords out: mortgage interest relief is restricted to the basic rate of 20% for residential lettings, so higher-rate taxpayers cannot deduct the full interest cost. Factor in capital gains tax as well, which falls due when you sell.