Buy to let investing: a practical beginner's guide
Learn how buy to let investing works: returns, financing, hidden costs, risks and a step-by-step plan to assess and buy your first rental property.
Buy-to-let investing12 min read
Rental Yield Calculator
Enter the price, rent and costs of a rental property to see its gross yield, net yield, cap rate and cash-on-cash return side by side. Add your loan to see the monthly cash flow after mortgage payments.
Results
- Gross yield
- 6.25%
- Annual rent ÷ purchase price
- Net yield
- 4.62%
- Net operating income ÷ total cost
- Cap rate
- 5.00%
- Net operating income ÷ purchase price
- Cash-on-cash return
- 1.37%
- Annual cash flow ÷ your own cash invested
| Net operating income (year) | €12,000 |
|---|---|
| Loan payments (year) | -€10,768 |
| Cash flow before tax per year | €1,232 |
| Cash flow before tax per month | €103 |
| Your cash invested | €90,000 |
| Loan repaid in year 1 Not included in cash flow, but builds equity | €4,041 |
Runs entirely in your browser. No data is sent to a server.
How it works
- Enter the purchase price and the one-off costs of buying (taxes, legal fees, agent, initial repairs).
- Enter the monthly rent you expect, an allowance for vacancy and the yearly costs you cannot pass on to tenants.
- Add the loan amount, interest rate and term, or set the loan to 0 for a cash purchase.
- Read gross yield, net yield, cap rate and cash-on-cash return. Change any input and the results update instantly.
FAQ
What is the difference between gross and net rental yield?
Gross yield divides the annual rent by the purchase price. Net yield first subtracts vacancy and the running costs you pay yourself, and divides by the total cost including purchase costs, so it is always lower and more realistic.
How is cap rate different from net yield?
Both use net operating income. Cap rate divides it by the price (or current value) only, while this calculator's net yield divides by price plus purchase costs. Cap rate is mainly used to compare properties with each other.
What does cash-on-cash return show?
It divides the yearly cash flow after loan payments by the cash you actually put in (price plus costs minus the loan). It shows how hard your own money works, including the effect of financing.
Are taxes included?
No. Results are before income tax, because tax rules differ by country and personal situation. Ask a tax adviser how rental income is taxed for you.
Is my data stored anywhere?
No. All calculations run in your browser and nothing you enter is sent to a server.
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