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Overview
Yield measures the return a property generates relative to its price. Gross yield uses rent ÷ price and is quick to compare suburbs and listings. Net yield deducts ongoing costs (rates, insurance, management, maintenance) and factors vacancy, giving a truer picture of income performance. Investors use yield alongside cash‑flow and growth expectations to build portfolios aligned to risk and goals. This guide clarifies the metrics, typical expenses to include, how vacancy changes outcomes, and provides a calculator to run your own scenarios.
Common expenses to include
- Property management fees\
- Council/municipal rates and insurance\
- Maintenance and letting fees\
- Estimated vacancy allowance (e.g., 2–5%)
Cash‑flow vs yield
Yield is a percentage metric. Cash‑flow measures dollars in vs out, including interest (if any). Both are useful when comparing investments.
Run scenarios with the Investment Property Yield Calculator.
Sources
- ATO — Rental properties (deductible expenses context): https://www.ato.gov.au
- CoreLogic — Market insights (rental yields context): https://www.corelogic.com.au
Frequently asked questions
Is gross yield enough to compare properties?
Gross yield ignores costs and vacancy. Net yield or cash-flow is more informative for comparisons.
How does vacancy affect net yield?
Including a realistic vacancy allowance reduces expected income and lowers net yield to a more conservative estimate.
RealEstateCalc Editorial
Property & Finance ResearchThe RealEstateCalc editorial team researches and writes about Australian property, finance, and tax topics. All content is fact-checked against official sources including the ATO, state revenue offices, ASIC Moneysmart, and the RBA.
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