How the calculator works
| Figure | Formula |
|---|---|
| Gross yield | Monthly rent × 12 ÷ purchase price |
| Rent collected | Monthly rent × 12 × (52 − empty weeks) ÷ 52 |
| Running costs | Agent fee (% of rent collected) + insurance + repairs + service charge + certificates + other |
| Net yield | (Rent collected − running costs) ÷ (purchase price + buying costs) |
| Mortgage payments | Interest-only: loan × rate. Repayment: standard monthly annuity × 12 |
| Cash flow | Rent collected − running costs − mortgage payments |
| Return on cash | Yearly cash flow ÷ (purchase price + buying costs − loan) |
Gross yield is the headline figure agents and listings quote. Net yield is closer to what you actually keep, because it takes off empty weeks and the costs every landlord pays — including the certificates the law requires, which many yield calculators leave out.
Compliance costs most calculators miss
- Gas safety check every 12 months if there's any gas appliance — typically £60–£120. Gas safety certificate cost
- EICR at least every 5 years — typically £80–£350. EICR cost
- EPC every 10 years, and in England and Wales the property must reach EPC C for all tenancies by 1 October 2030, with a spending cap of £10,000. EPC C by 2030
- Private Rented Sector Database in England: £65 per property per year once your region opens (from 15 December 2026). Database dates
- Licensing if your council runs a selective or HMO scheme — fees are set locally. HMO licence guide
Not sure which of these apply? The landlord certificate checker lists them for your property.
Frequently asked questions
How do you calculate rental yield?
Gross rental yield is the annual rent divided by the purchase price, as a percentage. For example, £1,100 a month is £13,200 a year; on a £200,000 property that is a gross yield of 6.6%. Net yield takes off running costs and empty weeks first.
What is the difference between gross and net yield?
Gross yield uses the full rent and the purchase price only. Net yield subtracts the costs of letting — agent fees, insurance, repairs, certificates, service charges and empty periods — and divides by the total you paid including buying costs, so it is always lower.
Does rental yield include the mortgage?
No. Yield measures the property's income against its price. The mortgage is shown separately here as cash flow and return on the cash you put in, because two landlords with the same property can borrow very different amounts.
Is the result before or after tax?
Before tax. Individual landlords pay income tax on rental profit, and mortgage interest only earns a basic-rate tax reduction rather than being deducted. Your tax depends on your other income, so check with an accountant.