Rental Yield Calculator Australia: Gross and Net Yield in 2026

Rental yield calculator Australia: gross and net yield in seconds

Gross rental yield is the annual rent divided by the property price, multiplied by 100. A property bought for $600,000 and rented at $550 a week earns $28,600 a year, a 4.77% gross yield, and after $6,000 of yearly holding costs the net yield is 3.77%.

Put your own price, weekly rent and yearly costs into the calculator below. It works the figures out as you type, and you don’t need to give us any contact details to use it.

How this calculator works. Annual rent is the weekly rent multiplied by 52, with no allowance for vacancy, so add the rent you expect to lose to vacant weeks to your holding costs. Gross yield divides that annual rent by the price you enter, which can be the purchase price or today's value, without stamp duty or other buying costs. Net yield takes your holding costs off the rent before dividing. Mortgage interest, depreciation and income tax are left out, so both figures are before finance and before tax.

The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for a loan. The specific details of your loan will be provided to you in your loan contract. It is advised that you get in touch with us before taking out a loan so that we can provide you with advice that is tailored to your situation.

Yield is the opening number, not the verdict. It tells you how hard the rent works against the price. It doesn't tell you how much of that rent a lender will count, or what the property costs you once the loan is in place. The sections below cover the formulas, what counts as a good yield in each capital as at September 2026, and how lenders treat your rent.

What is rental yield?

Rental yield is a property's yearly rent expressed as a percentage of its price or value. It's the quickest way to see whether a property leans towards income or towards capital growth, and it's the figure data providers such as Cotality publish each month for every capital city.

There are two versions, and they answer different questions.

Listings, portals and market reports almost always quote gross yield because it needs only two numbers. Net yield is the one to run before you make an offer, because two properties with the same gross yield can carry very different costs.

How to calculate rental yield: formulas and a worked example

Gross rental yield formula

1. Multiply the weekly rent by 52 to get the annual rent.
2. Divide the annual rent by the purchase price (or current value).
3. Multiply by 100.

Gross rental yield = (annual rent ÷ property price) × 100

Net rental yield formula

Net rental yield = ((annual rent − annual holding costs) ÷ property price) × 100

Holding costs are the costs of owning the property itself: council and water rates, strata levies for a unit, landlord insurance, property management fees, repairs and maintenance, land tax where it applies, and an allowance for vacant weeks. Mortgage interest stays out. Net yield measures the property, not your loan, so two buyers with different finance get the same answer for the same property.

Worked example: a Western Sydney house and a unit

The figures below are illustrative, not quotes. They show how the same formulas can rank two properties differently once costs come in.

The unit wins on both measures, but look at where its money goes. Strata alone takes about 14% of the rent, and in a building with lifts, a pool or a gym the levies can be much higher. The house is the classic Sydney growth purchase: a thin yield that the buyer accepts in the hope of stronger long-run gains.

Land tax is $0 in both columns on one assumption: this is your only taxable land in NSW and its land value is under the general threshold. For the 2026 land tax year that threshold is $1,075,000, and above it you pay $100 plus 1.6% of the excess. The thresholds have been frozen at their 2024 levels (Revenue NSW). The test uses a three-year average of the unimproved land values set by the Valuer General, not the price you paid, and it applies to the combined value of all the taxable land you own. A second investment property can push you over it quickly. Our NSW land tax guide works through the numbers.

What is a good rental yield in Australia? 2026 benchmarks by city

Good depends on the market. A 3.4% gross yield is the Sydney average right now, and in Darwin the same figure would be well below par. The table shows gross yields for every capital at 30 September 2026, from Cotality's Home Value Index released 1 October 2026.

Source: Cotality Home Value Index, results as at 30 September 2026. Gross yields; Cotality publishes new figures at the start of each month.

Yields are rising because rents are still climbing while values fall. Cotality's national figure of 3.85% was the highest since August 2019, with national dwelling values down six months in a row. As a rough guide for capital cities, 3% to 4% is typical of the larger markets, above 4.5% is strong, and anything above 6% usually comes with a smaller market or more vacancy risk.

Units out-yield houses in every capital because unit prices sit further below house prices than unit rents sit below house rents. Houses have historically delivered more capital growth, and strata levies narrow the gap once you move from gross to net.

How lenders treat rental income

This is where a good yield and a good loan part ways. No lender counts the full rent, and lenders differ in how much they knock off.

Most lenders count 80% of the rent

Lenders "shade" rental income to allow for vacancy, management and repairs. Counting 80% of the gross rent is the common setting. Over 2026 several lenders on our panel have moved higher, counting 85%, 90% or 95% of the rent, some only below a set loan-to-value ratio or for properties in eligible postcodes. The new policies sit alongside the old ones, so the same property can be assessed quite differently from one lender to the next.

On the house above, $37,440 of rent becomes $29,952 at 80% shading and $35,568 at 95%. That's up to $468 a month more income in the lender's assessment. Some of the lenders counting 95% then take the property's expenses off separately, so the real gap can be smaller.

Yield caps and rent-reliance limits

Some lenders also cap the yield they will accept. If the rent implies a yield above the cap, the excess is ignored. One major bank lifted its cap from 6% to 7% of the property's value in August 2026. Take a regional unit bought for $400,000 that rents for $600 a week. That's a 7.8% gross yield. Under a 7% cap the lender counts at most $28,000 of the $31,200 rent, before its other rental rules apply.

At least one lender also limits rental income to half of your total income for servicing. For an investor whose income is mostly rent, that single limit can take a lender off the list. We've had a client with several unencumbered investment properties where the cap at one lender sent us straight to lenders without it, and the lender choice mattered more than the rate.

The assessment buffer and your borrowing power

Lenders then test the whole loan at a rate well above the one you'll pay. APRA requires banks to assess new borrowers at least 3% above the loan rate, and APRA kept that buffer in place in May 2026. It's the single biggest reason long-time investors who "always qualified before" now get a lower number. Our borrowing power calculator gives a quick estimate before you talk to a lender.

Negative gearing after the May 2026 Budget

The 2026-27 Budget changes to negative gearing and capital gains tax passed Parliament in June 2026 (Treasury summary). From 1 July 2027, negative gearing on residential property is limited to new builds. If you buy an established property after 7:30pm AEST on 12 May 2026, its losses can only be offset against other residential income, such as rent and capital gains, not against wages. Any excess losses carry forward to later years. Properties held before that time keep the old treatment. For gains that accrue from 1 July 2027, the 50% capital gains tax discount is replaced with an inflation-based method and a minimum 30% tax on capital gains. Investors in new builds can choose to keep the 50% discount. The legal definition of a new build is still before Parliament, so check a specific property with your accountant.

Lenders have rebuilt their servicing calculators around this, and they don't all treat a post-cut-off established property the same way. Some no longer add back the tax benefit of negative gearing for it. So an established, low-yield property bought now may cost more to hold after tax from July 2027, and may also support less borrowing today. Our guide to the negative gearing changes covers the detail; speak to your accountant about your own tax position.

Rental yield vs capital growth

High-yield properties pay more of their own way, which keeps your cash flow and your borrowing capacity healthier as you add properties. Low-yield properties in established suburbs are bought for growth, and the rent is secondary. Most portfolios end up with some of each, often growth first and yield later, when serviceability becomes the constraint.

What we tell investors is to give either strategy time. We've watched clients hold an outer-suburb property that did very little for years before the area turned. The ones who held through the flat years came out ahead of the ones who sold early.

Ways to lift the yield on a property you already own

1. Review the rent once a year. In NSW you can increase the rent on most leases no more than once every 12 months, with at least 60 days' written notice (NSW Government rent increase rules). A $20 a week rise on a $500,000 property adds about 0.21% to the gross yield.
2. Re-quote the outgoings. Management fees and landlord insurance are rarely shopped around, and every dollar saved goes straight to net yield.
3. Add a second dwelling where the zoning allows. A compliant granny flat adds a second rent. Check how lenders will treat that income before you build, because second-dwelling policies vary.
4. Be careful with short-stay income. Short-stay rent can look higher on paper, but lenders generally want permanent rental income, so it may not help your next loan at all.
5. Buy the yield in the first place. Yield is easier to get right at purchase than to fix after settlement. Our guide to researching an investment property with data shows what to check before you commit.

Frequently asked questions

What is a good rental yield in Australia?

As at 30 September 2026 the national gross rental yield was 3.85% (Cotality), with capital cities ranging from 3.4% in Sydney to 6.5% in Darwin. For a capital city property, 3% to 4% is typical of the larger markets and above 4.5% is strong. Regional markets averaged 4.3%.

Is 4.5% a good rental yield?

Yes, in most capital cities a 4.5% gross yield is above the national average of 3.85% and well above Sydney's 3.4%. Check the net figure too. Strata, rates, insurance and management can bring a 4.5% gross yield down to around 3%, before any interest.

Is 3.5% a good rental yield?

It's close to average. A 3.5% gross yield sits a little under the national 3.85% and is normal for Sydney, Brisbane and Adelaide dwellings right now. Investors at that level are usually buying for capital growth, so the question is whether you can carry the holding costs and the loan.

What is a 6% rental yield?

A 6% gross yield means the yearly rent equals 6% of the price: $36,000 a year, or about $692 a week, on a $600,000 property. Among the capitals only Darwin averages that much (6.5% as at September 2026). Some lenders cap the yield they will count in servicing, so very high yields don't always lift your borrowing capacity by as much as the rent suggests.

Does net rental yield include mortgage interest?

No. Net rental yield takes the property's own running costs off the rent, such as rates, strata, insurance, management, maintenance and vacancy, but leaves out loan interest. That keeps it a measure of the property rather than of your finance. Your cash flow after interest is a separate calculation.

Do lenders use the full rent when assessing my loan?

No. Most lenders count 80% of the gross rent, and a growing group count 85% to 95%, some only below a set loan-to-value ratio. Some also cap the yield they will accept or limit rent to a share of your total income. Which lender you apply with can change the amount you can borrow.

Run the numbers with a broker before you offer

The calculator gives you the yield. Whether the deal works comes down to how much of that rent a lender will count, and that varies more between lenders than most investors expect.

If you're weighing up an investment purchase, talk to our mortgage brokers. We'll compare lenders from our panel of 52+, show you how the ones that suit your situation treat your rental income and tell you what you can borrow before you put in an offer. Our residential investment loans page explains how investor loans are structured.

Patrick O'Brien, Director and Home Loan Specialist since 2001.

This article contains general information only and does not constitute financial advice. Your personal financial situation, objectives and needs have not been considered. Before acting on any information, you should consider its appropriateness to your circumstances. Speak to a qualified mortgage broker for advice tailored to your situation. Mortgage World Australia Pty Ltd is a credit representative (CR No. 396946) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Patrick O'Brien

Patrick is a Director and a Home Loan Specialist. He has been helping Australians with home loans since 2001. Prior to working as a mortgage broker Patrick was employed by Macquarie Bank for 3 years and also worked as an accountant for a publicly listed company. Patrick’s qualifications include:

Bachelor of Business, UTS Sydney. Majored in accounting and sub-majored in Finance and Marketing.
Diploma of Finance and Mortgage Broking Management FNS50310
Certificate IV in Financial Services (Finance/Mortgage Broking) FNS40804