i What this calculator does
Measures a South African buy-to-let the way a lender or an experienced investor would: gross yield, which is the headline agents quote; net yield after vacancy, levies, rates, insurance, maintenance and management, which is what you actually earn on the price; monthly cash flow after the bond instalment; and cash-on-cash return on the deposit and transfer costs you put in. It also shows the break-even rent, the point at which the property stops costing you money each month.
The comparison that matters is net yield against your bond rate. If the net yield is below the rate you borrow at, the property is cash-flow negative on a full bond and the investment case rests on capital growth and rental increases, which is a different and riskier proposition than a property that pays for itself.
Illustrative. Rental income is taxable at your marginal rate with expenses deductible, capital growth is not modelled, and vacancy, maintenance and rates vary widely by area. Not investment advice.
See also: Dividend Withholding Tax Calculator and Estate Duty Calculator.
Frequently asked questions
What is a good rental yield in South Africa?
Gross yields of 7% to 10% are common in affordable and student areas and 5% to 7% in established suburbs; net yields run two to three points lower. Compare the net yield with your bond rate and with what listed property or a fixed deposit pays without the work.
What is the difference between gross and net yield?
Gross yield is annual rent divided by price. Net yield deducts vacancy, levies, rates, insurance, maintenance and management first, and is the figure that reflects what you earn. Agents quote gross; investors decide on net.
Is rental income taxed?
Yes, at your marginal rate, after deducting expenses including bond interest, levies, rates, insurance, repairs and agent fees. The calculator shows pre-tax figures; a profitable property adds to your taxable income.
What vacancy allowance should I use?
One month a year, about 8%, is a common planning figure for a well-located unit. Student and holiday areas need more; long-term family rentals in high-demand suburbs often less.
Should I include the bond in the yield?
No. Yield measures the property; cash flow measures your financing. The calculator keeps them apart so you can see whether a weak cash flow is a property problem or a gearing problem.
What about capital growth?
It is not in the yield figures. Over long periods South African residential property has roughly tracked inflation plus a little, with wide differences by area. Treat growth as the upside, not the plan.
Want to embed this calculator on your site?
Embed this calculator
Free to use on your own site. Copy the code below and paste it where you want the calculator to appear.
<iframe src="https://www.tradeanswers.co.za/embed/rental-yield-calculator.html"
width="100%" height="920" style="border:0;max-width:520px"
title="Rental Yield Calculator - TradeAnswers" loading="lazy"></iframe>
<p><a href="https://www.tradeanswers.co.za/rental-yield-calculator.html">Rental Yield Calculator</a> by <a href="https://www.tradeanswers.co.za/">TradeAnswers</a></p>