Rental yield is the quickest way to compare investment properties. It tells you how much rent a property earns each year as a percentage of what it's worth, so you can compare a $700,000 unit with a $1.2 million house on equal terms.
Gross yield is the simple version: annual rent divided by the property's value.
Gross yield = (weekly rent × 52) ÷ property value × 100
For example, a unit worth $700,000 that rents for $560 a week earns $29,120 a year in rent, a gross yield of about 4.2%.
Net yield takes off the costs of owning the property, which gives a more realistic picture. Typical costs include:
If those costs added up to around $9,500 a year on the same unit, the net yield would be about 2.8%. Every property is different, so use your own figures.
Net yield doesn't include loan repayments, tax or depreciation. Those depend on your own situation, so talk to your broker and accountant.
Yields vary from suburb to suburb and between property types. As a rule, units return a higher yield than houses, while houses close to the coast tend to deliver more of their return through capital growth. You'll find current rents and yields for each suburb on our suburb profile pages, such as Warradale and Glenelg.
The free Rental Yield Calculator lets you enter a purchase price, weekly rent and running costs to see both gross and net yield. The most important number in any yield calculation is the rent, so make sure it's based on what's actually leasing nearby.
Book a free rental appraisal with our property management team.
Figures are examples only. This is general information, not financial advice.