Looking at the gross rental yield of a property is vital for landlords to understand if a property will be a good buy-to-let investment. 

The gross rental yield of a property is based on the rental income you will receive from letting out the property before any other costs have been deducted, such as maintenance and repairs, and the purchase price of the property. 

Comparing the likely buy-to-let yields of different properties can help you decide which is right for you. 

How do you calculate rental yield?

The most popular way of working out rental yield is to take the annual rental income of a property (actual or predicted) and divide it by the purchase price of the house or flat. Our rental yield calculator below allows you to calculate the property yield based on property purchase price and monthly rental income.

Therefore, the calculation to work out a rental yield for a property costing £200,000 with an annual rental income of £9,600 would be:

Gross rental yield  = 9,600/200,000 = 0.048

This figure is multiplied by 100 to get the percentage, so the gross rental yield of this property is 4.8%. 

Make it easy for yourself, by using our simple and quick rental yield calculator below to work out potential property yields.

Rental yield based on property purchase cost

Rental yield: 0%

While our rental yield calculator can give you an idea of return on investment, it’s best to speak to an expert to get advice on purchasing a buy-to-let property and likely rent level.

As an expert letting agent in Edinburgh, ESPC Lettings offers buy-to-let advice, a full property management service along with property marketing and let only packages. Contact us today using the form below, emailing landlord@espc.com or calling 0131 253 2847.

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