Rental yield is the standard pre-tax measure of an investment property's income return. Gross yield is the headline figure agents quote in listings; net yield is the figure you actually live with after holding costs. This calculator returns both, plus vacancy-adjusted cashflow and cash-on-cash return on your deposit.
Gross yield vs net yield
Gross yield = annual rent / purchase price × 100
Net yield = (effective rent − costs) / purchase price × 100
Cash on cash = (effective rent − costs) / deposit × 100
Gross yield is comparable across listings because it ignores building-specific costs that vary widely. Net yield is the truer figure because two properties with the same rent can have very different strata fees, council rates and management costs.
A 5% gross yield on a $700,000 property is $35,000 of rent. After ~$10,000–$14,000 of typical holding costs (strata + rates + insurance + management) and a 2–3% vacancy hit, the net yield is usually 3.0–3.7%. That's the actual pre-tax return on the property — the bit you live with.
What this calculator covers
- Weekly, monthly, or annual rent (auto-converts to annual)
- Vacancy rate as a percentage — applied to net yield only (REIA convention)
- Council rates, water rates, building / landlord insurance, body corporate
- Maintenance budget as a flat dollar amount
- Property management fee as a percentage of effective rent
- Letting / advertising fees and other costs
- Cash-on-cash return when you supply a deposit amount
What it does not cover
- Loan interest — yields are pre-financing. Use the Negative Gearing Calculator for the financed picture.
- Depreciation — non-cash deduction. Use the Property Depreciation Calculator to model Div 40 + Div 43.
- Tax — yields are pre-tax. Tax structuring (individual vs SMSF vs trust) doesn't affect yield, only the after-tax return.
- Capital growth — yield is income-only. The capital growth component is separate and usually larger over a long hold.
Vacancy rate guidance
The calculator's default vacancy rate is 2%. Reasonable ranges by market type:
| Market | Typical vacancy |
|---|---|
| Tight metro (Sydney, Melbourne inner ring) | 1–2% |
| Established suburbs, mid-size cities (Brisbane, Adelaide, Perth) | 2–3% |
| Outer suburbs, regional centres | 3–5% |
| Mining / remote regional towns | 5–10%+ |
| Holiday rentals (excluded — use specialist tooling) | 30%+ |
Source: PIPA / REIA market commentary. SQM Research publishes the most-cited vacancy rate data series for Australian capitals.
Management fee guidance
Property management fees in Australia are quoted as a percentage of effective rent. Typical ranges:
- Metro Sydney / Melbourne: 5.5–7.7% (incl. GST)
- Brisbane / Perth / Adelaide: 7.7–9.9%
- Regional: 9.9–12.1%
Letting fees (one-off, charged when a new tenant is signed) usually equal 1–2 weeks' rent, plus a re-let fee on each tenancy renewal. Advertising and inspection fees are sometimes line items, sometimes bundled.
Why both gross and net yield matter
Gross yield is for comparing listings in the same market quickly — a 3% gross yield property is usually a worse income deal than a 5% gross yield property in the same suburb, before you do any deeper work. It's a triage filter.
Net yield is for the deal you're actually buying — it's the figure that tells you whether you'll be cash-positive, neutral, or have to fund the property each year. Two listings with identical 4% gross yields can be 3.6% vs 3.0% net once strata, rates, and management are accounted for.
For investors using leverage, cash-on-cash return is the more relevant metric. A 3.5% net yield on a $700,000 property is $24,500/year — but if your deposit was $140,000, that's a 17.5% cash-on-cash return on the actual cash you put in. (Pre-loan-interest. Post-financing the figure is much smaller.)
Common buyers-agent inputs
When buyers agents run yield analysis for a client, the inputs typically look like:
| Property type | Gross yield assumption | Vacancy | Management |
|---|---|---|---|
| Sydney / Melbourne house | 2.8–3.5% | 2% | 6.5% |
| Brisbane / Perth / Adelaide house | 4.2–5.5% | 2.5% | 7.5% |
| Regional metro house | 4.8–6.0% | 3% | 8% |
| New apartment (CBD) | 4.0–5.0% | 4% (heavy supply) | 6% |
| Established apartment (inner ring) | 3.0–4.2% | 2% | 6.5% |
Plug actual numbers from the listing into the calculator above; the typical ranges are just a sanity check on what comes out.
Frequently asked questions
What's the difference between gross and net rental yield?
Gross rental yield is annual rent ÷ purchase price × 100, before any costs. Net rental yield is annual rent (vacancy-adjusted) minus holding costs, divided by purchase price × 100. Net yield is the more honest measure but gross yield is what real estate agents and listing portals quote, so both are useful.
What's a 'good' rental yield in Australia?
Sydney and Melbourne metro typically yield 2.5–4% gross — capital growth, not yield, is the strategy. Brisbane, Perth and Adelaide capitals usually yield 4–5% gross. Regional centres can yield 5–7% gross. Mining or remote regional towns can yield 8%+ but with much higher vacancy and capital risk. The 'right' yield depends on your strategy — yield-focused investors target 5%+ net; growth-focused investors accept lower yields if the suburb has strong long-run growth.
Should I include the loan in the calculation?
Not for yield — yield is a property-level measure, independent of how it's financed. To see your actual cashflow position with a loan, use the Negative Gearing calculator, which models interest cost, depreciation, and the marginal tax effect.
How does vacancy rate affect the yield?
Each percentage point of vacancy reduces effective rent by about 1% of gross rent. A 4% vacancy on $30,000 gross rent costs $1,200 a year. The calculator applies vacancy to net yield only — gross yield uses unadjusted rent (REIA / PIPA convention) so the headline number is comparable to listing data.
What's cash-on-cash return and how is it different from yield?
Cash-on-cash return is net annual income ÷ cash deposit invested × 100. Yield is property-level (denominator is purchase price). Cash-on-cash is investor-level (denominator is what you actually put in). Leveraged property typically shows much higher cash-on-cash than yield because the bank funds 80% of the asset but you only commit 20% of cash.
Does this account for tax?
No. Yields are pre-tax. To model the tax effect, use the Negative Gearing calculator (which adds your marginal rate and depreciation) or the CGT Projection calculator (which models the tax on sale). Yield is how property investors compare deals; tax effects are about timing and structuring, not deal selection.
What expenses should I include?
Council rates, water rates (if not on-billed), building insurance, landlord insurance, body corporate / strata fees, maintenance budget (rule of thumb: 1% of property value per year for older stock, less for new builds), property management fees (typically 6–9% of rent in metro areas, plus letting fees), advertising, depreciation reports if amortised, and any specific levies (e.g. flood-prone areas, council infrastructure charges).
Is this calculator accurate for SMSF investments?
The yield calculation is identical regardless of ownership structure. The tax effects differ significantly — SMSF income is taxed at 15% in accumulation phase and is exempt in pension phase. Use the CGT Projection calculator's SMSF options to model the tax on sale; for accumulation income tax, work with an SMSF-specialist accountant.
Sources
Last updated: 2 May 2026