Rental costs
Rental yield: separate rent from cash flow
Content owner: MyInvestin product guides
Revised . Specialist editorial review pending.
A gross percentage leaves out costs, finance and empty periods.
Define the calculation
Gross rental yield is annual rent divided by the purchase price, multiplied by 100. For a simple hypothetical example, £12,000 annual rent on a £200,000 purchase gives 6% before costs. This is arithmetic, not a forecast or a target return.
Build a separate cost budget
List maintenance, management, insurance, service charges and periods without rent. Add financing and tax as separate assumptions. A net operating estimate and cash after mortgage payments answer different questions, so name each calculation and show what it includes.
Use documented inputs
Check whether the rent is an existing tenancy amount, an asking rent or an estimate. Keep the source and date. Use the property cost tools with your own assumptions and check mortgage terms with a suitable adviser.
Sources and further reading
These guides explain questions and calculations; they do not assess an individual property's suitability or replace professional advice.