Work out rental income requirement instantly with clear inputs, formula shown and shareable results.
Net rental income is well below gross rent once vacancy and operating costs are deducted, so the gross rent needed is higher than the target. Dividing that by the gross yield gives the property value the target actually requires.
Rental requirement
Gross rent = target / [(1 - vacancy)(1 - operating share)]; property value = gross rent × 12 / gross yield
Figures are estimates for planning only. Prices, returns, inflation and personal circumstances all change. This is not financial or tax advice — speak to a qualified adviser before making decisions.
Vacancy, maintenance, tax and management fees together typically consume a quarter or more of gross rent.
It is capital-intensive relative to the income produced, which is why the required property value is so large.