AU Rental Yield Calculator 2026 —
Gross & Net Yield, Cash Flow

Gross rental yields vary significantly by city and property type in Australia (CoreLogic 2026 data). Units typically yield more than houses.

Sydney: houses 2.5–3.5%, units 3.5–4.5%. Melbourne: houses 2.5–3.5%, units 4.0–5.0%.

Brisbane: houses 3.5–4.5%, units 5.0–6.0%. Perth: houses 4.0–5.5%, units 5.5–7.0%.

Adelaide: houses 3.5–4.5%, units 5.5–7.0%. A gross yield above 4% is generally considered solid for residential property in Australia's major cities; above 5% is strong.

Net yield (after expenses) is typically 1–1.5% lower than gross yield.

Gross rental yield = Annual Rent ÷ Property Value × 100. It ignores all expenses and is the most commonly quoted figure by real estate agents.

Net rental yield = (Annual Rent − Annual Expenses) ÷ Property Value × 100. Expenses include council rates, water rates, property management fees, insurance, maintenance, strata fees, and repairs — but NOT mortgage interest or principal.

Net yield is the more accurate measure of property performance. Example: a $700,000 Sydney apartment renting at $650/week has a gross yield of 4.83% but after $12,000 in annual expenses, net yield drops to 3.11%.

Negative gearing occurs when your rental income is less than your total investment property costs (interest expense + other deductible expenses). The resulting loss is deductible against your other income (salary, business income), reducing your taxable income.

Example: $30,000 rent, $40,000 in costs (interest + expenses) = $10,000 loss. At a 37% marginal tax rate, the government effectively subsidises $3,700 of that loss.

Whether it is 'worth it' depends on capital growth expectations — negative gearing makes mathematical sense only if you expect the property to appreciate enough to offset ongoing cash shortfalls. Properties in flat or falling markets can produce years of cash losses with no offsetting gain.

CHANGE AHEAD: this is the law for 2026-27 and is what the calculator models, but from 1 July 2027 an ESTABLISHED dwelling acquired after 7:30pm AEST on 12 May 2026 can no longer offset rental losses against salary — losses are quarantined to residential property income and carried forward. Property held before that cut-off is grandfathered, and new builds keep full negative gearing.

The ATO allows deductions for: mortgage interest (not principal); council rates; water rates (your portion); landlord insurance; property management and letting agent fees; maintenance, repairs and cleaning; strata/body corporate fees; gardening and lawn mowing; pest control; advertising for tenants; accountant and legal fees related to the property; and depreciation (Division 43 building allowance and Division 40 plant and equipment). You cannot deduct purchase costs (stamp duty, conveyancing) immediately — these are added to your cost base for CGT purposes.

You also cannot deduct expenses for periods the property was not genuinely available for rent.

Two types of depreciation apply to investment properties: (1) Division 43 — Building allowance: 2.5% per year of the original construction cost (not land) for properties built after 17 July 1985. On a $500,000 property with $300,000 construction cost, this is $7,500/year in non-cash deductions. (2) Division 40 — Plant and equipment: items like ovens, dishwashers, carpets, and blinds depreciated using ATO-set effective lives.

Note: from 1 July 2017, second-hand residential properties (purchased after the budget announcement) cannot claim Division 40 on items that were in the property when you bought it. A Quantity Surveyor (QS) report ($500–$800) typically pays for itself many times over in the first year for new builds.

Property management fees in Australia typically range from 6–12% of the weekly rent, plus GST. Sydney and Melbourne agencies typically charge 5–8%; smaller cities and regional areas often charge 8–12%.

Additional fees often apply: letting/tenant placement fee (1–2 weeks' rent), lease renewal fee ($50–$200), routine inspection fees ($50–$100 each), maintenance coordination fees (5–10% of invoices). Always request a full fee schedule before signing a property management agreement.

On a $600/week rental, a 10% management fee costs $3,120/year in management fees alone.

Based on CoreLogic and REIA data for 2026: Sydney median gross yield — houses 2.7%, units 4.2%. Melbourne median gross yield — houses 2.9%, units 4.7%.

Brisbane median gross yield — houses 3.9%, units 6.0%. Perth median gross yield — houses 4.9%, units 6.8%.

Adelaide median gross yield — houses 4.2%, units 6.5%. Hobart gross yield — houses 4.5%, units 5.8%.

Capital city units generally yield 1–2 percentage points more than houses in the same suburb due to lower purchase prices relative to rental income, but have higher strata fees and fewer depreciation benefits.

Units typically provide higher rental yields than houses in the same suburb but come with trade-offs. Units generally offer: higher gross yield (1–2% more than houses); lower maintenance costs; strata management handles building exterior; but: ongoing strata/body corporate fees ($2,000–$15,000+ per year for luxury buildings); no land content limits long-run capital growth; special levies can arise unexpectedly; post-2017 restrictions on plant and equipment depreciation for second-hand units.

Houses typically offer: lower gross yield; higher maintenance; full control over the property; land content drives long-run capital growth; better depreciation outcomes for new builds. Which is 'better' depends on your investment strategy — income now vs. capital growth long-term.