📊 Rental Yield Calculator
Work out gross and net yield on any investment property. Know the numbers before you make an offer.
Add expenses for net yield (optional)
Rental yields in Australia — why are they so low?
Rental yield measures how much annual income a property generates relative to its value. A $1 million property renting for $600 per week generates $31,200 per year — a gross yield of 3.1%. That's not a lot.
Sydney and Melbourne consistently rank among the lowest-yielding major cities in the world, often sitting at 2–3% gross yield. Compare that to many European cities (4–6%) or US cities (5–8%). The reason? Australian property prices have grown faster than rents for decades, compressing yields.
This matters because a 2–3% yield on a highly leveraged property means you're almost certainly negatively geared — the rental income doesn't cover the mortgage, rates, insurance, and management fees. The entire investment thesis rests on capital growth continuing.
- Gross yield: Annual rent ÷ purchase price × 100. Easy to calculate but ignores all costs.
- Net yield: (Annual rent − expenses) ÷ purchase price × 100. More realistic — typically 1–1.5% below gross yield after rates, insurance, management, and maintenance.
- Regional variation: Darwin, Perth, and Brisbane have historically offered better yields than Sydney and Melbourne — worth checking if income return matters to your strategy.