We provide this handy rental yield calculator to help you work out a projected rental yield and make informed decisions. Simply adjust the sliders to your monthly rental income and the purchase price or current value of the rental property. Then you’ll have your answer.
Based on our experience, we would suggest a rental yield of 6% or higher is good for buy to let properties. You can learn more here: Good Rental Yield
Be advised that this rental yield calculator is a tool to be used as a guide. It is not a quotation under the Consumer Credit Act, and all results are calculated based on the figures you enter.
This calculator does not account for the ongoing maintenance costs the property may incur. Mortgage approvals are subject to affordability checks, credit checks and a formal property valuation.
What is rental yield?
The rental yield on a buy-to-let property is the amount you earn, or hope to earn, from a property investment. It is expressed as a percentage of the property’s value. Investors and landlords use rental yield calculations to assess the value of an investment. It gives you an idea of the return on your initial spend.
How is rental yield for UK properties calculated?
To calculate rental yield, you simply need to apply the following formula:
Rental yield = (Monthly rental income x 12) ÷ Property value
This is the calculation our rental yield calculator performs for you. Let’s break down how to use this formula for yourself:
Multiply the monthly rental income (confirmed or expected) by 12 to get the annual income.
Divide this figure by the amount you purchased the property for or its current market value.
Multiply this by 100 and you will have the percentage that is the rental yield. A good yield would be 5-8% or higher.
The monthly rental income is £1,200
The annual rental income is £1,200 x 12 = £14,400
You paid £225,000 for the property
The rental yield is (£14,400 ÷ £225,000) x 100 = 6.4%