Rental Yield Calculator
Rental Calculator Explained
Our rental yield calculator enables you to enter the costs associated with the purchase of a buy to let property including the initial purchase price and legal fees in order to see the potential NET rental yields you can generate.
Acquisition Costs
Letting income
Net Yield
You can calculate the rental yield of your property, portfolio of properties or a property you are about to purchase using our calculator above.
The first step is to find your Total Acquisition Cost by adding the purchase price, Stamp Duty and legal fees together. Following this, you need to enter the weekly rental income and the percentage of the year the property will be occupied to get your total Letting Income.
The Letting Income is then worked out as a percentage of the Total Acquisition Cost to get the final NET rental yield.
What classifies as a good rental yield is entirely dependent on your personal situation and investment strategy. If you are planning for the very long term then you might accept a smaller annual return in favour of stability.
However, as a general guideline, a yield of 5% or higher in an area with growth potential is desirable. Good indicators or future prosperity include significant projected population growth and a booming economy.
The two areas of the UK which are the best prospects for property investors are Manchester and Birmingham. The housing markets in these cities are - far faster than London and the rest of the UK - and look set to continue on this path for years to come.
The latest regional rental report from JLL shows that Manchester and Birmingham will see rental growth of 16.5% and 15.9% respectively in the next five years - a figure higher than both the national average and the prediction for London.
Properties like Uptown, Park Gate, Oxygen and AXIS are perfectly positioned to make the most of this growth in the years to come - making them ideal for anyone looking for a high-yielding off-plan property investment in the UK.
When purchasing a buy to let property in the UK you have to take several costs into account when calculating your return on investment. Some of the major ones include:
- Stamp Duty - A tax levied on property purchases over a certain cost threshold, although there is currently a Stamp Duty Holiday in place until 31st March 2021 - read more here.
- Legal fees - You will need to hire a solicitor when purchasing a property and their fees are taken into account when working out your NET rental yield.
You can enter these costs into our calculator above to achieve the most accurate NET rental yield figure.
Please note, we provide this content for your general guidance. This does not constitute financial, legal or professional advice. The purchase of a property can include additional fees which this tool may not include. Always seek support from a professional advisor before making final decisions. We cannot be held responsible or liable for any loss or damage that arises from your use of this content. Whilst we only publish information we believe to be correct, we cannot guarantee this at all times.
