Rental yield calculator — gross, net and US cap rate
Three ways to read the same number. Enter price, rent and running costs and we'll show gross yield, net yield (a.k.a. US cap rate), and how the deal compares to typical bands in your market.
Three numbers, three different questions answered.
Gross yield is annual rent divided by purchase price. It's the headline number agents quote. It tells you nothing about whether the property is actually profitable.
Net yield is the same calculation, but with the actual rent (after vacancy) on top and operating expenses (rates / property tax, insurance, management, maintenance) taken off. It tells you what the property earns before you pay the bank. This is the number to compare deals on.
Cap rate is the US name for net yield. The math is identical. Cap rate is also the way US commercial real estate is priced — buyers literally back-calculate price from a target cap rate ("if I want 7% cap, this property is worth $X").
Typical bands per market (gross)
- NZ main centres: 3–5% gross. Auckland averages ~3.5%, Wellington ~4.5%, regions 5–7%.
- AU capital cities: 3–4.5% gross. Regional 5–7%.
- US: Coastal metros 4–6% cap rate, Midwest / Sunbelt secondary cities 7–10%.
Yield isn't the whole story — capital growth, tax treatment and how the property fits inside your broader portfolio matter at least as much. But it's the fastest filter to apply when you're comparing dozens of deals.
Yield calculator FAQ
What's a 'good' rental yield in New Zealand?
Most NZ residential rentals sit between 3% and 5% gross yield in main centres (Auckland, Wellington), and 5–7% in regional towns. Below 4% you're relying entirely on capital growth; above 6% you're typically in higher-management-intensity property (multi-units, regional, student rentals). Net yield is usually 1–1.5% lower once rates, insurance, management and maintenance come out.
And in Australia?
Australian capital-city rentals typically yield 3–4.5% gross. Regional Australia (Perth outskirts, Adelaide, Hobart, regional Queensland) can reach 5–7%. AU investors more commonly accept lower yields because negative gearing rules let losses offset other taxable income — so yield matters less than total return after tax.
How is US cap rate different from net yield?
Mathematically, they're the same — net operating income divided by property price. The terminology is just different (and US cap rate excludes financing costs, just like our net yield). US investors target 5–10% cap rates depending on market: coastal metros are tighter (4–6%), Midwest and Sunbelt secondary cities can hit 7–10%.
Should I use gross yield or net yield to compare deals?
Net yield. Gross yield ignores running costs — and the gap between two properties with the same gross yield can be enormous once you subtract council rates / property tax (which scale with value), management (which scales with rent), and maintenance (which scales with age). Net yield is the apples-to-apples number for comparing deals.
Run the rest of the numbers
DTI calculator
See whether your next loan fits inside the RBNZ / APRA / US DTI cap before you talk to a bank.
LVR calculator
Work out your LVR (or LTV in the US) and the deposit you need to clear investor and owner-occupied bands.
Cashflow calculator
Weekly and annual net cashflow on a rental, with rates, insurance, management, vacancy and interest baked in.
Stress-test calculator
See what your repayments look like at the bank's stress-test rate — the rate they actually use to approve you.
Yield is the filter. Stackhold is the rest of the answer.
Compare yield, growth, cashflow and lending fit across every property in your portfolio at once.
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