Rental yield is the most quoted number in property investing and the most consistently botched.
Here's how to do it right, and why it suddenly matters more than it has in a decade.
The basic maths
Gross rental yield is annual rent divided by property price, times 100.
A property renting at $650 a week costs $33,800 a year in rent. On a $700,000 purchase, that's a 4.8 percent gross yield.
Simple. Also, mostly useless on its own.
The number that actually matters
Net yield is what's left after the costs of owning. Council rates, insurance, property management fees, maintenance, strata levies if it's a unit, land tax where it applies.
Those typically eat 1 to 1.5 percent of yield on a house, and often more on a unit with fat strata fees. A 4.8 percent gross unit with $6k annual levies can net less than a 4.2 percent gross house.
This is the classic mistake. Comparing properties on gross yield when the cost structures underneath are completely different.
Why yield just got promoted
For years, yield was an afterthought because negative gearing meant the taxpayer helped cover your losses and capital growth did the rest.
That world ended in the May budget. Buy an established property now and rental losses can no longer offset your salary. The rent has to carry the property, which makes net yield a first order question on every purchase.
The good news is yields are actually improving. National vacancy is back at record lows around 1.5 percent, rents rose 5.9 percent over the past year, and gross yields in the combined capitals are the highest in over a year.
The trap to avoid
Don't chase the yield number blind. The highest yielding suburbs often yield well because nobody expects growth there, and a 6 percent yield on an asset going nowhere loses to a 4.5 percent yield on one compounding at 7 percent a year. The skill is the overlap: solid yield, tight vacancy, and genuine growth drivers in the same postcode.
Run the numbers in seconds
Our rental yield calculator does gross yield instantly for any property you're considering.
Use it to screen. Then dig into the net picture on anything that passes.
And for finding the suburbs where yield and growth overlap, that's street-level knowledge. Converta matches you with a vetted buyer's agent who specialises in investment purchases in your target market. Free, no obligation, first call within 24 hours.
Sources: Cotality, ATO, 2026.