1. What is Rental Yield?

Rental yield is a percentage figure that shows how much of an income a property generates compared to its value. It's a key metric for property investors to assess the profitability of a rental property.

2. How Does the Calculator Work?

The calculator uses the rental yield formula:

Where:

• Annual Rent — Total yearly rental income (GBP)
• Property Value — Current market value of the property (GBP)

Explanation: The formula calculates what percentage of the property's value is earned back each year through rental income.

3. Importance of Rental Yield Calculation

Details: Rental yield helps investors compare different properties, assess investment potential, and make informed decisions about property purchases.

4. Using the Calculator

Tips: Enter the annual rental income in GBP and the current property value in GBP. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a good rental yield in the UK?
A: Generally, 5-8% is considered good, with 8%+ being excellent. London properties typically have lower yields (3-5%) than northern cities.

Q2: What's the difference between gross and net yield?
A: Gross yield (calculated here) doesn't account for expenses. Net yield deducts costs like maintenance, insurance, and agent fees.

Q3: Should I only consider rental yield when investing?
A: No, also consider capital growth potential, location, tenant demand, and property condition.

Q4: How often should I calculate rental yield?
A: Recalculate annually or when rental prices or property values change significantly.

Q5: Does this work for HMO properties?
A: Yes, but use total annual rent from all rooms and remember HMOs typically have higher yields but also higher running costs.