Gross vs Net Yield: Why Net Is the Honest Number in 2026

What gross yield measures — and what it leaves out

Gross yield is annual rent divided by purchase price, expressed as a percentage. It answers exactly one question: how much rent does this asset generate relative to what it costs to buy? As a first-pass screening tool that is genuinely useful — it lets you rank a shortlist in seconds from two numbers anyone can verify.

The problem is what it omits. Gross yield treats a property as if tenants never leave, nothing breaks, no one manages it, and no government charges rates or land tax on it. Two properties with identical gross yields can sit a long way apart once those costs are counted, because the costs do not scale neatly with rent.

Net yield: the number after the property pays its own bills

Net yield is annual rent minus the recurring costs of holding the property, divided by the purchase price. It describes what the asset itself produces before financing — the income stream that is actually available to service a loan or land in your pocket.

Note what net yield conventionally excludes: loan interest and tax. Those depend on your borrowing and your circumstances rather than on the property, so they belong to a separate cashflow calculation. Net yield is the property-level truth; cashflow is your personal position layered on top of it.

Everything that sits between gross and net

These are the recurring costs a net yield calculation subtracts. The percentages shown are the defaults Plintha's engine applies, and every one of them can be overridden in Advanced settings:

• —Property management — Plintha assumes 8% of rent by default. Self-managing removes the fee but not the work.
• —Vacancy — a default allowance of 3% of rent covers the periods between tenants when the property earns nothing but still costs money.
• —Maintenance and repairs — Plintha defaults to 0.7% of the purchase price per year. Because this is keyed to price rather than rent, it bites relatively harder where rent is low against the purchase price.
• —Insurance — building and landlord cover is an annual cost of ownership that gross yield never sees.
• —Council rates and water charges — recurring, unavoidable, and varying with the property.
• —Land tax — applies to investment property (your principal place of residence is generally exempt) and is generally deductible. Plintha computes the bracket maths exactly; where the land value is unknown it estimates it at roughly 60% of price for a house and flags the figure [ESTIMATE].

Why net is the honest number

Every cost in the list above recurs for every year you hold the property. A gross yield overstates the income stream not once but annually, compounding the flattery across the whole holding period. Worse, the gap between gross and net is not a fixed haircut you can apply mentally: management and vacancy scale with rent, maintenance is keyed to the purchase price, and rates and land tax follow their own logic. The only way to know a property's real yield is to do the arithmetic on that property.

Net yield also connects to everything downstream. It is the income line that a loan must be serviced from, the base the tax position is built on, and the figure a stress test pressures. Start from gross and every subsequent number inherits the error.

How Plintha calculates net yield

Plintha applies the defaults above automatically, tags every figure in the report with its provenance — computed, [ESTIMATE] with the assumption shown, or [ASSUMED] and overridable — and models the loan separately using defaults of 80% LVR and 6.5% p.a. interest-only, all adjustable. Every analysis includes a stress test: interest rates 2% higher, an extended vacancy, and the interest-only period expiring onto principal-and-interest repayments.

The result is a verdict — Meets Criteria, Conditional, or Below Criteria — with a 0–100 score across both a Yield lens and a Growth lens. The free tier includes one analysis per month, with no card required.

Common questions