How rental yield is calculated
Checked 15 Oct 2026. The costs to include follow Moneysmart's guide to buying an investment property.
Gross yield = annual rent ÷ purchase price × 100. It's the quick comparison figure used in listings.
Net yield = (annual rent after vacancy − annual costs) ÷ purchase price × 100. It's a better guide to what the property actually earns before mortgage interest and tax.
Example: $520/week on a $550,000 property is $27,040 a year: a 4.92% gross yield. With 2 weeks' vacancy ($26,000 of rent received) and $7,500 of yearly costs, net income is $18,500, a 3.36% net yield.
Costs that turn gross into net
- Council and water rates, and strata levies for a unit
- Landlord insurance
- Property management, usually a percentage of the rent plus letting fees
- Repairs and maintenance
- Land tax, if your landholdings are over your state's threshold
Mortgage interest, depreciation and tax aren't in the yield, because they depend on how you finance and own the property, not on the property itself. For those, use the rental cashflow and negative gearing calculator.
General information only, not financial, tax or credit advice. Check your situation with the ATO, your state revenue office or a licensed adviser.
Rental yield FAQs
What is the rental yield on a $550,000 property renting for $520 a week?
4.92% gross: $27,040 a year ÷ $550,000. With 2 weeks' vacancy and $7,500 of costs, net income is $18,500, a 3.36% net yield.
What is the yield on a $750,000 property at $650 a week?
4.51% gross. With 2 weeks' vacancy and $9,000 of yearly costs, it nets $23,500, a 3.13% net yield.
What costs should I include?
Council and water rates, landlord insurance, strata levies, property management fees, repairs and maintenance, and land tax if it applies.
Does this include mortgage repayments?
No. Yield measures the property's return on its price. Use the mortgage calculator for repayments and the rental cashflow calculator for your cash flow after tax.
What's a good rental yield?
About 3% to 5% gross is typical in Australia's capital cities. Cotality's figures to 30 September 2026 put the national gross yield at 3.85%, with houses at 3.6% and units at 4.7%, and capital cities ranging from 3.4% in Sydney to 6.5% in Darwin. These are industry estimates, not official statistics. Higher-yield areas often have lower capital growth, so compare a property with its local average rather than a national rule.