Rental Yield Calculator Explained: A 2026 Australian Investor's Guide
Rental yield is one of the first metrics every Australian property investor learns — and one of the most commonly misunderstood. In this guide we'll unpack what gross and net yield actually mean, walk through the formulas, and show you how to use our free rental yield calculator to assess any property in under a minute.
What is rental yield?
Rental yield is the annual rental income a property generates, expressed as a percentage of its purchase price (or current market value). It's a quick way to compare the income-producing potential of one property against another — across suburbs, states, or even asset classes.
There are two flavours: gross yield and net yield. Both are useful, but they tell very different stories.
Gross rental yield formula
Gross rental yield is the simpler of the two. It ignores expenses entirely — useful for quick screening, but it almost always overstates real returns.
Gross Yield (%) = (Weekly Rent × 52) ÷ Purchase Price × 100Example: A $600,000 house renting for $500/week has a gross yield of (500 × 52) ÷ 600,000 × 100 = 4.33%.
Net rental yield formula
Net rental yield is what you actually keep after paying for the property's ongoing costs. This is the more honest number when comparing investments.
Net Yield (%) = (Annual Rent − Annual Expenses) ÷ Purchase Price × 100Annual expenses typically include council rates, water rates, insurance, property management (often 7-9% of rent), repairs and maintenance, body corporate fees (for apartments and townhouses), and land tax.
On the same $600,000 property with $7,000 of annual expenses, the net yield is (26,000 − 7,000) ÷ 600,000 × 100 = 3.17%. That 1.16 percentage-point gap is the difference between a viable cashflow play and a marginal one.
What's a good rental yield in Australia?
There's no single answer — yields vary by capital city, suburb tier, and property type. Broadly, as of early 2026, the bands look like this:
- Inner-Sydney / inner-Melbourne houses: 2.0–2.8% net yield, with growth-focused returns.
- Outer suburbs of Sydney/Melbourne: 2.8–3.5% net yield.
- Brisbane, Perth, Adelaide capital cities: 3.0–4.5% net yield.
- Regional and outer-ring growth corridors: 4.5%+ net yield, often with stronger cashflow but slower capital growth.
A higher yield isn't automatically 'better' — it usually trades off against capital growth. The right balance depends on your investment goals.
How to use the free rental yield calculator
Our calculator does the maths for you in real time. Enter the purchase price, weekly rent, and annual expenses, and you'll see both gross and net yield instantly — plus cash flow, ROI, debt coverage ratio and a year-by-year projection.
Frequently asked questions
Does rental yield include the deposit?+
No. The standard formula uses the full purchase price, not just the deposit. If you want a deposit-only return view, look at 'cash-on-cash return' instead — our calculator shows both.
Should I aim for high yield or capital growth?+
It depends on your strategy. High-yield properties typically pay for themselves but appreciate slowly. Growth-focused properties may run at a loss week to week but build wealth through equity over a decade. Many Australian investors blend both across a portfolio.
Do I include stamp duty in the yield calculation?+
Traditional rental yield doesn't, but our calculator separately accounts for stamp duty and other purchase costs when computing ROI and cash-on-cash return — giving you both the textbook number and the real-world one.