Why use this calculator
Advertised yields flatter almost every property. Agents quote gross yield, which is a year of rent divided by the price, as if the place were never empty and cost nothing to hold. Once you take out a couple of vacant weeks, the management fee, council and water rates, strata, insurance and a realistic repair budget, the return on the same property can fall by a full percentage point or more.
This calculator shows both numbers side by side so you can compare listings on the figure that actually matters, then subtracts your loan interest to show whether the property will fund itself or need topping up from your salary every week. Comparing a unit with heavy strata levies against a house with none is impossible on gross yield alone, and this is where the difference becomes visible.
How to use it
- Enter the property price, or a current valuation from a recent bank or agent appraisal if you already own it.
- Enter the weekly rent from the lease, or from comparable listings on the major property portals if you are still buying.
- Set the vacant weeks you expect each year, which a local property manager can estimate from vacancy rates in the suburb.
- The management fee is the percentage quoted in the agency agreement.
- Council and water rates come from the rates notices.
- Strata levies are on the body corporate notice or in the contract.
- Insurance comes from your renewal notice, maintenance is your own allowance, and loan interest is the yearly interest on your loan statement.
What each result means
- Gross rental yield
- A full year of rent as a percentage of the price, with no allowance for vacancy or costs. Useful for quick comparisons only.
- Net rental yield
- What the property earns after vacancy and running costs, as a percentage of price. This is the fairer way to compare two properties.
- Weekly rent for neutral gearing
- The weekly rent at which rent collected, after vacancy and the management fee, exactly covers running costs and loan interest. Above it the property is positively geared; below it you fund the shortfall yourself.
- Rent collected after vacancy
- The rent you actually receive in a year once the vacant weeks you entered are taken out.
- Property management fees
- The agent's percentage of the rent collected. Letting fees and advertising charged on a new tenancy are not included.
- Running costs
- Everything it costs to hold the property for a year except the loan: rates, strata, insurance, maintenance and management.
- Net operating income
- Rent collected minus running costs. It is the income the property produces before any financing cost.
- Cash flow after interest
- Net operating income minus loan interest. A negative figure is the yearly shortfall you fund from other income before tax.
- Weekly cash flow after interest
- The same cash flow divided by 52, which is easier to test against your weekly household budget.
- Gearing position
- Positive when rent covers costs and interest, negative when it does not. Negative gearing losses can reduce tax on other income.
The formula
Gross yield equals weekly rent times 52, divided by the property price, times 100. Rent collected equals weekly rent times 52 minus vacant weeks. The management fee equals rent collected times the fee percentage. Running costs equal rates plus strata plus insurance plus maintenance plus the management fee. Net operating income equals rent collected minus running costs, and net yield equals net operating income divided by price, times 100. Cash flow after interest equals net operating income minus yearly loan interest, before tax, depreciation and principal repayments.
How this number is used in practice
In Australia the gap between gross and net yield is usually one to two percentage points. Units carry strata levies that can run to several thousand dollars a year, which is why a unit with a higher gross yield than a nearby house can end up with a lower net yield.
Houses have no strata but bigger maintenance bills and higher council rates. Regional properties often advertise gross yields above 5 per cent, while inner city houses in Sydney and Melbourne commonly sit near 3 per cent, with investors in those markets relying on capital growth rather than rent.
Net yield deliberately leaves out the loan, because financing is a choice that differs between buyers. Cash flow after interest is where your own loan comes in, and at current rates most properties bought with a large loan are negatively geared. That shortfall is deductible against your other income, which softens it, but a tax deduction only returns part of a dollar you have already spent.
Land tax is not included here and applies in every state except the Northern Territory once your landholdings pass the state threshold.
Worked examples
$650,000 house, $600 a week, two vacant weeks, 7.7 per cent management, $31,000 interest
Gross yield 4.80 per cent, net yield 3.23 per cent, and cash flow after interest of -$10,010, so the property is negatively geared by about $192.50 a week.
$480,000 unit, $520 a week, $3,200 strata, bought outright
Gross yield 5.63 per cent, net yield 3.46 per cent, and $16,598 a year of positive cash flow with no loan.
$380,000 regional house, $450 a week, three vacant weeks, $20,000 interest
Gross yield 6.16 per cent, net yield 3.69 per cent, and a negative cash flow of -$5,990 after interest.
When people use it
- Comparing two listings on net yield rather than the gross figure in the advertisement
- Checking whether a unit's strata levies wipe out its higher advertised yield
- Estimating the weekly shortfall you will fund from your salary on a negatively geared property
- Testing how much the rent must rise before the property becomes positively geared
- Reviewing the return on a property you already own at its current value
Tips
- Ask for the strata levy notice and the last two years of body corporate minutes before you buy, because a special levy for building work can erase a year of yield.
- Use the rent the property is actually leased at, not the agent's appraisal, if it already has a tenant.
- Property management fees in Australia commonly run from about 5.5 to 9 per cent including GST, plus letting fees each time a new tenant signs.
- Budget at least 1 per cent of the building value a year for maintenance on an older home, and more for pools and timber decks.
- Check your state's land tax threshold. A second investment property can push your total landholding over it and cost thousands a year.
- Depreciation on the building and fittings is a non cash deduction that can improve after tax cash flow, especially on newer properties, so get a quantity surveyor's schedule.
What it assumes, and where it stops being accurate
- Gross yield uses a full 52 weeks of rent. Net yield and cash flow use rent collected after the vacant weeks you enter.
- Net yield excludes loan interest, depreciation, land tax and income tax, which is the usual market convention.
- Cash flow after interest is before tax and ignores principal repayments, which build equity rather than being a cost.
- Letting fees, advertising, tenant find fees and landlord insurance excesses on claims are not modelled.
- All costs are yearly figures held constant. Rent and costs usually rise over time at different rates.
Terms used on this page
- Gross rental yield
- Yearly rent as a percentage of the property price, before any costs or vacancy.
- Net rental yield
- Yearly rent collected minus running costs, as a percentage of the property price, excluding loan interest.
- Negative gearing
- Holding an investment whose income is less than its costs including interest, with the loss deductible against other income.
- Vacancy
- Weeks in which the property has no paying tenant, usually between one lease and the next.
Questions people ask
- What is the difference between gross and net rental yield?
- Gross yield is a year of rent divided by the price, with no costs taken out. Net yield subtracts vacancy and running costs such as rates, strata, insurance, maintenance and management before dividing by the price. Net yield is the fairer comparison between properties because costs vary widely.
- What is a good rental yield in Australia?
- There is no single figure. Regional houses often show gross yields of 5 to 7 per cent, while inner city houses in Sydney and Melbourne can sit near 3 per cent. A higher yield often comes with slower capital growth or higher vacancy risk, so judge yield alongside the location and the condition of the property.
- Should I calculate yield on the purchase price or the current value?
- Use the purchase price when you are deciding whether to buy. If you already own the property and want to know whether your money is working hard enough, use the current market value, because that is the capital you could release by selling and invest somewhere else.
- Why is loan interest not included in net yield?
- Net yield describes the property, and financing describes the buyer. Two people can buy the same property with very different loans. Keeping interest out lets you compare properties fairly, and the cash flow after interest result then shows what your own loan does to the numbers.
- What does negatively geared mean?
- A property is negatively geared when rent does not cover its running costs and loan interest. The loss can be deducted from your other income, which reduces your tax, but you still fund most of the shortfall yourself and rely on capital growth to make the investment worthwhile over time.
Use this with
Property Rental Yield Calculator answers one part of the question. These pick up where it stops: Negative Gearing Calculator, Investment Property Calculator, Stamp Duty Calculator, Mortgage Calculator and Capital Gains Tax Calculator.
Where these figures come from
Figures and rules on this page follow Australian law and ATO guidance.
- Australian Taxation Office. Rental property income, deductions and negative gearing rules
- Moneysmart: How to invest. Independent guidance on property investing risk and return
- ATO: Tax rates for Australian residents. Income tax brackets for 2026-27
Property Rental Yield Calculator produces an estimate for general information. It is not financial, tax, medical, legal or engineering advice. read the full disclaimer. Spotted a wrong number? Report it and it gets fixed. The form picks up this calculator and the inputs you used.