What is a good rental yield in Australia?

In Australia, a gross rental yield of 3-5% is considered average, 5-7% is good, and above 7% is high yield. Capital city properties typically return 3-4% gross yield, while regional areas can exceed 6-8%. A higher yield doesn't always mean a better investment — high-yield properties may have lower capital growth prospects, higher vacancy rates, or be in areas with limited demand. Most investors aim for a balance between rental yield and long-term capital growth.

What's the difference between gross and net rental yield?

Gross rental yield is calculated by dividing annual rental income by the property purchase price — it gives a quick snapshot but doesn't account for costs. Net rental yield deducts annual expenses (council rates, insurance, maintenance, strata fees, property management fees) from the rental income before dividing by the purchase price. Net yield gives a more accurate picture of your actual return. For example, a property with 5% gross yield might only return 3-3.5% net yield after expenses.

What expenses reduce net rental yield?

Common expenses that reduce net rental yield include: council rates ($1,500-$3,000/year), landlord insurance ($1,000-$2,000/year), property management fees (7-10% of rent), maintenance and repairs (budget 1% of property value per year), strata/body corporate fees ($2,000-$6,000/year for units), water rates, and advertising costs for tenant turnover. Mortgage interest is typically excluded from yield calculations as it relates to your financing, not the property's performance.

Rental Yield Calculator

Calculate gross and net rental yield on any investment property. Enter the property price, weekly rent, and annual expenses to see your yield, cash flow, and vacancy-adjusted return.

Last verified: 1 July 2025

How do I calculate rental yield on an Australian property?

Gross yield = annual rent ÷ property price × 100. Net yield subtracts annual expenses (rates, insurance, management, strata, maintenance) before dividing. Capital city yields typically sit at 3-4% gross; regional properties often clear 5-7%. Above 7% is high-yield but usually signals lower capital growth. Source: CoreLogic, SQM Research, and state land registry data.

Worked example. $600,000 property renting for $550/week = $28,600/year → 4.77% gross yield. Subtract ~$9,000 in annual expenses (council rates, insurance, 8% management, 1% maintenance, strata) → $19,600 net → 3.27% net yield. Mortgage interest is excluded from yield — it relates to your financing, not property performance.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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