1. What is Rental Yield?

Rental yield is a key metric used by property investors to assess the potential return on investment for buy-to-rent properties. It represents the annual rental income as a percentage of the property's value.

2. How Does the Calculator Work?

The calculator uses the rental yield formula:

Where:

• Annual Rent — Total expected rental income for one year (AUD)
• Property Value — Current market value or purchase price of the property (AUD)

Explanation: The formula calculates what percentage of the property's value you can expect to earn back each year through rental income.

3. Importance of Rental Yield Calculation

Details: Rental yield helps investors compare different properties, assess investment viability, and make informed decisions about where to invest in the Australian property market.

4. Using the Calculator

Tips: Enter the expected annual rent in AUD and the property value in AUD. Both values must be positive numbers for accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: What is a good rental yield in Australia?
A: Generally, 5-8% is considered good, but this varies by location and property type. Regional areas often have higher yields than capital cities.

Q2: Should I use purchase price or current value?
A: For new purchases, use purchase price. For existing investments, current market value gives a more accurate picture.

Q3: Does this include expenses?
A: No, this is gross rental yield. Net yield would deduct expenses like maintenance, rates, and property management fees.

Q4: How does rental yield compare to capital growth?
A: High-yield properties often have lower capital growth potential, and vice versa. A balanced portfolio considers both.

Q5: Are there regional differences in Australia?
A: Yes, yields are typically higher in regional areas and lower in capital cities where property values are higher.