Are You Maximising Your Rental Yield?
Rental yield is one of the most important figures every landlord should understand, yet it’s often overlooked. If you want to know whether your investment is truly working for you, understanding your yield is the first step. In this guide, we break down what it means, how to calculate it and, importantly, how to improve it.
Understanding Rental Yield — And How to Improve It
If you’re a landlord, you’ll likely have heard the term rental yield. But what does it actually mean in practice?
Put simply, rental yield measures the return you’re achieving on your investment property.
There are two key figures to understand:
Gross Yield - This is your annual rental income divided by the property’s purchase price, multiplied by 100.
For example, if you purchased a property for £150,000 and receive £850 per month in rent (£10,200 per year), your gross yield would be 6.8%.
Gross yield gives you a quick snapshot of performance, but it doesn’t tell the full story.
Net Yield - Net yield takes things further by factoring in your costs, insurance, maintenance, mortgage payments, management fees and other outgoings.
This figure gives a more realistic view of your true return and highlights where efficiencies might be improved.
As a general guide, yields above 6–7% are often considered strong, but the “right” yield depends on your strategy and long-term goals.
Five Ways to Strengthen Your Rental Yield
1. Review Your Rent Regularly - Ensure your rent reflects current market levels. Small, sensible adjustments over time are often more sustainable than large increases later on.
Balance market value with tenant retention, long-term, reliable tenants have real value.
2. Keep an Eye on Costs - Review insurance policies, maintenance providers and service contracts regularly.
Landlords who treat their property as a business tend to achieve stronger returns.
3. Review Your Mortgage - When your mortgage product is due for renewal, explore the options available.
The right financial advice can make a meaningful difference to your overall return. Speak with our Financial Services team who can give you advice using "whole of the market".
4. Invest Strategically - Location, property type and tenant demand all influence yield.
Properties that attract consistent demand and require less maintenance often provide more stable long-term returns.
5. Be a Proactive Landlord - Well-maintained properties attract better tenants.
Responding promptly to issues, investing in quality fixtures and maintaining standards can justify stronger rents and reduce costly turnover.
Ready to Make Your Investment Work Harder? Understanding your rental yield is one thing, optimising it is another.
Whether you’re reviewing your portfolio, considering a new investment or simply want clarity on how your property is performing, we’re here to help.
Speak to our lettings team today for a no-obligation portfolio review and discover how to strengthen your returns with confidence.
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