What Is a Good Rental Yield in Australia in 2026?

The short answer

A good rental yield is not one number.

For some inner-city houses, a gross yield around 2.5% to 3.5% may be normal if the buyer is relying on capital growth. For regional units or higher-risk assets, investors may expect a higher gross yield to compensate for vacancy, maintenance and resale risk.

The better question is not "is the gross yield high?" It is "does the net yield and cash flow make sense for this property?"

Gross yield formula

Gross rental yield is:

Annual rent divided by purchase price, multiplied by 100.

Example:

• Weekly rent: $650.
• Annual rent: $33,800.
• Purchase price: $800,000.
• Gross yield: 4.23%.

Gross yield is useful for quick comparisons, but it ignores costs.

Net yield matters more

Net yield allows for expenses such as:

• Council rates.
• Water rates.
• Strata or body corporate fees.
• Insurance.
• Property management.
• Repairs and maintenance.
• Land tax.
• Vacancy.

Net yield is usually much lower than gross yield.

An apartment with 5% gross yield and high strata fees may produce worse net yield than a house with 4% gross yield and lower recurring costs.

Cash flow is different again

Yield measures return against property value. Cash flow measures money in and out.

A property can have a decent net yield and still be negative cash flow if the loan is large and interest rates are high.

That is why investors should model:

• Gross yield.
• Net yield.
• Loan interest.
• Land tax.
• Tax impact.
• Capital growth assumptions.

Use the Investment Property Yield Calculator for yield, then check tax impact with the Negative Gearing Calculator.

What counts as good in 2026?

As a rough guide:

• Below 3% gross yield usually needs strong growth expectations.
• 3% to 4% can be acceptable in blue-chip markets if costs are controlled.
• 4% to 5% is often a healthier starting point for balanced investors.
• Above 5% can be attractive, but check vacancy, tenant quality, insurance and maintenance risk.

These are not rules. They are prompts for due diligence.

Bottom line

A good rental yield is one that survives real costs.

Do not buy on gross yield alone. Check net yield, cash flow, land tax and the quality of the asset.

Sources: ATO rental property deduction guidance, state revenue office land tax guidance and RealEstateCalc calculator methodology. This article is general information, not financial or tax advice.