# Rental Yield Calculator | Tool For Property Investor — 13 Jul 2023

As a property owner or aspiring investor, calculating your rental yield is crucial in determining the potential profitability of your investment. A rental yield calculator can help you easily calculate both gross and net rental yields for individual properties or your entire portfolio. In this guide, we'll walk you through how to use a rental yield calculator, why it's important to calculate your rental yield, and tips on maximizing your rental yield for your property investment.

## Why Calculate Your Rental Yield?

Calculating your rental yield can help you evaluate the performance of your investment and make informed decisions when it comes to managing your property. It's a quick and easy way to determine how much return you're getting on your investment in relation to the rental income you receive.

In addition, if you're considering a buy-to-let mortgage, knowing your rental yield can help you determine if you're eligible for a mortgage and how much you can borrow. Lenders usually require a minimum rental yield to ensure that your property is generating enough income to cover mortgage payments.

## How to Use a Rental Yield Calculator

If you haveProperties (a house or apartment) in the UK that you're renting out, you can use a special calculator to figure out how much money you're making from it. This calculator will do the math for you, but only if you're using money from the UK.

If you're not using money from the UK, you'll need to do the math yourself. But don't worry, it's not too hard!

Here's a step-by-step guide on how to use one:

1. Decide whether you want to work out your rental yield based on how much you paid for the property, or based on how much the property is worth now.
2. Select the appropriate option from the drop-down menu on the calculator.
3. If you're working out rental yield based on the current property value, enter the property value into the calculator.
4. If you're working out rental yield based on the property purchase cost, you can either enter the entire cost into the box provided, or use the plus button to add in additional costs such as stamp duty, mortgage fees, and refurbishment costs.
5. Enter the monthly rent amount your tenant pays you into the calculator.
6. If you know the combined total of your annual costs, enter that amount into the calculator. If not, use the plus button to add individual costs like council tax, insurance, ground rent, etc.
7. Once you've entered all the information, click the big orange calculate button on the calculator.
8. The rental yield percentage will then be displayed, telling you how much money you're making from your rental property compared to how much you spent to buy it or how much it is worth now.

## Who Can Use a Rental Yield Calculator?

A rental yield calculator is useful for anyone looking to calculate rental yield on a property they already own or one they plan to invest in. Whether you're a buy-to-let landlord, a new landlord, or a letting agent, a rental yield calculator can help you make informed decisions about your investment.

## Tips for Maximizing Your Rental Yield

Now that you know how to use a rental yield calculator, here are some tips on how to maximize your rental yield:

• Choose your property location wisely. Properties in high-demand areas tend to have higher rental yields.
• Price your rent competitively. Research the local rental market and set a reasonable rental price that's in line with other properties in the area.
• Consider offering additional amenities or services. This can help you attract more tenants and potentially increase rental income.

### What is rental yield?

Rental yield is the percentage of return on investment that a property generates in relation to the rental income it receives.

### What is a good rental yield?

A good rental yield varies depending on the property location and local rental market. In general, a rental yield of 5% or higher is considered good.

### How do you calculate gross rental yield?

To calculate gross rental yield, divide the annual rental income by the property value or purchase cost and multiply it by 100.

### How do you calculate net rental yield?

To calculate net rental yield, deduct your annual expenses from your annual rental income, then divide the result by the property value or purchase cost and multiply it by 100.

## Conclusion

Calculating your rental yield is an essential step in evaluating the potential profitability of your property investment. A rental yield calculator can help you easily determine the expected rental yield for a property, saving you time and effort in manual calculations.