Gross vs net yield: the five-minute investor guide

Gross yield is the headline: annual rent divided by purchase price. It's useful for scanning suburbs quickly, and it's the number on most listings. But nobody banks gross yield.

Net yield subtracts the running costs — council and water rates, insurance, property management, maintenance, strata levies, land tax where it bites, and an allowance for vacancy. On a freestanding house those costs commonly absorb 20-30% of rent. On an apartment with high strata fees they can pass 40%.

This is why a 4.5% gross house and a 4.5% gross apartment are not the same investment. Run both through a net calculation with real numbers before comparing. Our rental yield calculator lets you set the expense ratio precisely for this reason.

Finally, remember yield and growth trade off. Tight inner suburbs often deliver 2-3% gross but stronger long-run capital growth; outer and regional markets flip that equation. Neither is "better" — they suit different strategies, which is exactly what our suburb investor scores are designed to make visible.