Rental yield is a key metric for property investors, indicating the annual return from rental income relative to the property's value. Understanding yield helps you compare investments and assess cash flow.
Gross Rental Yield
The simplest calculation: Annual Rent ÷ Property Value × 100
Example: $500/week rent × 52 weeks = $26,000/year
$26,000 ÷ $650,000 property value × 100 = 4% gross yield
Net Rental Yield
More accurate: (Annual Rent - Expenses) ÷ Property Value × 100
Expenses include rates, insurance, management fees, maintenance, and vacancy allowance.
2026 Yield Benchmarks
| Location Type | Typical Gross Yield |
|---|---|
| Sydney/Melbourne Inner | 2.5% - 3.5% |
| Brisbane/Perth | 4% - 5% |
| Regional Centres | 5% - 7% |
| Mining Towns | 7% - 10%+ |
Yield vs Capital Growth
High-yield properties often have lower capital growth potential, and vice versa. Consider your investment goals and cash flow needs when choosing.