Rental yield calculator & comparator

The yield number your investor is quoting is probably wrong.

How to show buy-to-let investors their real return – and why that conversation makes you indispensable.

Kieran Slinger · Propalt · For letting agents

Buy-to-let investors talk about yield constantly and understand it precisely almost never. Gross yield is the easy bit: annual rent over purchase price. But gross isn't what reaches the bank account. Once management, maintenance, insurance, voids and mortgage costs come out, net yield can be less than half the headline.

Show an investor that real picture – their property, benchmarked against the local market – and you've handed them something their accountant, their broker and their own spreadsheet never did.

The yield calculation that tells the truth

A property generating £1,800 per month in rent on a £350,000 purchase looks like a 6.2 percent gross yield. That sounds reasonable. Here is what the net yield picture looks like when you work through it properly:

A 4.6 percent net yield pre-mortgage is a very different picture from the 6.2 percent headline. Whether that works for the investor depends on their mortgage rate, their tax position and their growth expectations. But they need to see the real figure before they commit.

The letting agent who produces this calculation for a prospective investor – and benchmarks it against what similar properties are yielding in the same area – is doing something most agents do not bother with. The investor remembers that.

The area benchmark that gives the number context

A single yield figure without a benchmark is not especially useful. A 4.6 percent net yield in an area where the average for comparable properties is 3.8 percent is a strong investment. The same figure in an area where comparable properties average 5.5 percent suggests the purchase price was too high or the rent is below market.

The Propalt Rental Yield Calculator and Comparator generates gross and indicative net yield for any UK address, benchmarks it against the local area by type and bedroom count, and shows the distribution of yields across the postcode. The investor gets a complete picture in a single report – and the letting agent gets to be the one who gave it to them.

An investor who understands their real yield is an investor who makes better decisions – and remembers who showed them how.

Give every investor the yield picture that tells the truth.

Try the Rental Yield Calculator → propalt.ai

Yield calculations are illustrative and based on example data. Actual costs vary by property, location and management arrangement. This article is general information for letting professionals and does not constitute financial advice.