Gross yield, net yield and the bond test
Three numbers decide whether a rental property is working for you: gross yield, net yield and the spread over a safe bond. Here is how to work each out.
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Put two to four properties side by side, in any of seven markets. See the yield, how it compares with the local bond, the cash flow with a loan, a long-run return and, above all, what would change the answer.
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How to read it
The numbers, in plain words
Net yield and the bond
Net yield is the rent you actually keep after empty months and running costs, as a share of the price. The local ten-year government bond is the safe alternative. A property needs to beat it to be worth the extra work and risk.
The annualised return
Rent and costs grow as you set. The home is sold at the end, less selling costs and a haircut for how hard it would be to sell. The result is the yearly return on the cash you put in, and it is only as good as your growth guess.
What would flip it
The tornado shows which assumption moves the answer most. The table below it shows how far one number would have to move before the verdict changes. Check the widest ones twice.
Defaults are starting points. Running costs, taxes, buying costs and the bond yield are shown as To be verified until you replace them with your own figures. Loan rates are guesses, not quotes. Compare percentages across currencies, not amounts. Saved comparisons stay in this browser only.
Questions
About the Property Lab
Does it send my numbers anywhere?
No. Everything runs in your browser. The share link puts your inputs in the address itself, after a # sign, which browsers do not send to servers. Anyone you give the link to can read them.
Why is a verdict sometimes “only works if prices rise”?
Because the rent alone does not beat the bond. The property then relies on price growth. That can be a fair bet, but it is a bet, and the tool says so.
What does “Surprise me” do?
It builds two or three made-up properties in random markets so you can see how the tool behaves. None is a real listing.
Is this advice?
No. It is a decision aid. Holdengard is not a licensed broker, adviser or listing portal. Check the facts with a qualified professional before you act.
From the Insights
Read more on this topic
Yield vs return: a Property Lab worked example
A worked example in the Property Lab: why a 3% rent yield, a home loan and a 10-year hold give very different results, and what would flip the verdict.
How Holdengard works, and what we are not
We share knowledge, build tools and run a community. We are not a broker, not a listing portal and not yet licensed anywhere. Here is the plain version.