What rental yield tells you
Rental yield is a quick way to compare income potential across different properties. It should not be used on its own because it does not show capital growth, void risk, local demand or the condition of the property.
Gross rental yield formula
Gross rental yield = annual rent / purchase price x 100.
For example, a property bought for £150,000 and rented for £900 per month produces £10,800 annual rent. The gross yield is 7.2%.
Net rental yield formula
Net rental yield = annual rent minus annual costs / total cash invested x 100.
Costs may include mortgage interest, insurance, letting agent fees, maintenance, service charges, ground rent, licensing, safety certificates and expected voids.
How Bellsoph helps
Use the rental yield calculator for deal modelling, then compare the postcode district against market trends, sales evidence and regeneration context.