Rental Yield Calculator

Want to work out how much rental yield a buy-to-let property could make? Use our calculator below to find out all you need to know.

Home Mortgage Calculators Rental Yield Calculator
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: January 4, 2024

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.

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Rental Yield Calculator

This calculator will show you the rental yield on your buy-to-let property using either the original purchase price, plus associated costs, or the current value. All you need to do is choose which option you want to base your calculation on and your monthly rental premiums.

Input either the original property purchase price or current value to work out the rental yield.
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Gross Rental Yield:

Net Rental Yield:

Now you've worked out what your current rental yield is, why not speak to a broker to see what buy-to-let mortgage/remortgage opportunities are available? With their expertise in this market they'll be able to identify a range of new deals which could reduce your mortgage payments and, as a result, improve your overall rental yield.

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.

Calculators are great, but they don't tell you everything you need to know. If you'd prefer an expert advisor to help, fill this out!

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:

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.

FAQs

This would depend on the type of buy-to-let property you were buying but as a standard rule a rental yield of between 8% and 10% would be classed as quite a healthy return on your investment.

Calculators are great, but they don't tell you everything you need to know. If you'd prefer an expert advisor to help, fill this out!

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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