Rental Yield Calculator

If you’re looking to purchase a buy-to-let property you can use our rental yield calculator to work out how much the potential returns could be on your investment. Once you have this information you can then speak to a mortgage broker we work with to look at all the options available to you.

Why calculate your rental yield?

The rental yield is a key indicator for how much return you can expect to receive from a buy-to-let investment property. So, it’s a good idea to understand what profit you can potentially make from the property you’re looking to buy before proceeding. The higher the rental yield – the more rental income you’re receiving, which in turn will help your chances of securing a buy-to-let mortgage.

How the rental yield on a buy-to-let property is calculated

The rental yield is calculated by dividing the annual rental income – minus any regular costs – by either the current value of the property or the purchase price you’re paying (if you haven’t yet completed the sale), expressed as a percentage.

So, for example if your annual rental income is £10,000 and the current value of the buy-to-let property is £200,000 then your rental yield is 5% (£10,000 / £200,000 x 100 = 5%).

How this calculator works

Our rental yield calculator allows you to take a more in-depth and precise look at how much money your buy-to-let property is actually making, providing output for both gross and net rental yield figures.

First, you need to input either the current value of the property or the original property price. If you opt for the latter then you can also add in any associated costs such as stamp duty or fees relating to your mortgage – this has the effect of giving a more accurate overall rental yield.

You can then input the monthly rent you currently receive or use an estimated figure for a property you’re looking to buy (for calculation purposes this will be annualised for you). Our calculator will also allow you to include ongoing annual expenses involved with running a buy-to-let investment.

Once you hit the ‘Calculate’ button the calculator will show you both the gross and net rental yields. The net rental yield takes into account any yearly expenses you have inputted, which are subtracted from the gross annual rent amount.

What you should do next

Working out whether your buy-to-let property is profitable or not is, of course, simply one step in the purchasing process and calculators can only give you a broad idea by allowing you to input a range of different figures to consider all possible combinations.

If you’re looking for more guidance on everything you should be aware of when buying a rental investment property, this is where a specialist buy-to-let mortgage broker can help.

They’ll be able to give advice across a wide range of scenarios and types of buy-to-let property investments, such as:

• Remortgaging a buy-to-let property
• Student buy-to-let mortgages
• Holiday let mortgages
• HMO mortgages
• Getting a buy-to-let property with bad credit
• Mortgages for AirBnB properties

The mortgage brokers we work with are selected, using our unique matching service, based on their ability to help with your specific needs and requirements.

So, get in touch today or call us on 0808 189 2301 and we’ll arrange for someone to contact you straight away.