Rental Yield Explained: Gross vs Net (Australian Investor Guide)
Everything Australian property investors need to know about gross and net rental yield — how to calculate, what good looks like by capital city, and when each metric matters.
Rental yield is the headline metric Australian property investors look at first. It tells you the annual income return on a property — but the way you measure it matters as much as the result.
Gross rental yield
Gross yield is annual rent divided by the property's value, expressed as a percentage. For a property bought at $750,000 renting for $600/week, that's $31,200 / $750,000 = 4.16%.
Gross yield is useful for quick comparisons across listings, but it ignores every cost of running the property — so it always overstates your real return.
Net rental yield
Net yield subtracts annual operating expenses (property management, vacancy, council and water rates, insurance, strata, maintenance) from rent before dividing by the property value. It does not subtract loan repayments — those vary by your borrowing structure, not the property itself.
On the same $750,000 property with $7,000 of operating expenses, net yield is ($31,200 - $7,000) / $750,000 = 3.23%. That's a 22% reduction from the gross figure — typical for AU residential property.
What good looks like in Australia
Capital city houses typically sit at 2.5–3.5% gross yield (Sydney and Melbourne at the low end, Perth and Brisbane higher). Regional and outer-suburb properties commonly hit 5–7% gross. Apartments generally yield more than houses but grow slower in capital value — the classic cash flow vs growth trade-off.
When yield matters most
Yield drives your cash flow. If you're cash-constrained, a 5%+ net yield property is far easier to hold long-term than a 2.5% Sydney house, even if the latter grows faster.
For a full picture including loan, tax and capital growth, plug your numbers into our Property Investment Analyzer.