Gross rental yield is the annual rent divided by the property’s value, expressed as a percentage, and net rental yield is the same calculation after annual holding costs are subtracted from the rent. Gross yield is useful for comparing properties quickly. Net yield is the one that tells you what the investment actually does.
Most listings and most investment conversations quote gross. The gap between the two figures is where the real decisions sit, and in Perth that gap is currently wider for houses than for units. This guide works both calculations through with current REIWA medians, explains what belongs in the cost side, and covers what yield does not tell you.
How do you calculate rental yield?
Gross rental yield is weekly rent multiplied by 52, divided by the property value, multiplied by 100.
Gross yield = (weekly rent × 52) ÷ property value × 100
Net rental yield subtracts annual holding costs from the annual rent before dividing.
Net yield = ((weekly rent × 52) − annual costs) ÷ (property value + purchase costs) × 100
Two conventions worth settling before you compare anything. Use the purchase price if you are assessing a property you are buying, and current market value if you are assessing one you already own; mixing the two makes portfolios impossible to compare. And decide whether the denominator includes purchase costs such as transfer duty and settlement fees. Including them is more honest, and it lowers the number.
What is the rental yield on a median Perth property right now?
Using REIWA’s published Perth metro medians, the gross yields for houses and units differ by more than a full percentage point.
| Median price | Median weekly rent | Annual rent | Gross yield | |
|---|---|---|---|---|
| House | $960,000 | $750 | $39,000 | 4.06% |
| Unit | $690,000 | $700 | $36,400 | 5.28% |
Median price and rent figures: REIWA Perth market insights, last updated 22 September 2026, covering transactions for the 12 months to August 2026. Annual rent and yield are calculated from those figures. REIWA revises the underlying data as more transactions settle.
That gap is the single most useful thing in this article for a Perth investor. A median unit costs $270,000 less than a median house and rents for only $50 a week less, which is why yield-focused buyers look at apartments while growth-focused buyers look at land content. Neither is automatically right. They answer different questions.
Note that these are metro-wide medians. Your suburb, your property type and your specific property will all differ, and the riverside south suburbs sit in a different part of the distribution to the outer corridors. Use the medians as a benchmark, not as a substitute for the numbers on the property in front of you.
What costs belong in a net yield calculation?
Every recurring cost of owning the property, before finance. Leaving items out is the most common way an investment looks better on paper than it performs.
Include, at minimum:
- Council rates and water rates
- Strata levies where the property is in a scheme, including contributions to both the administrative and reserve funds
- Building insurance, and landlord insurance if you hold it
- Property management fees, plus letting fees and any lease renewal charges
- Repairs and maintenance, budgeted as an annual allowance rather than recorded as zero in a good year
- Land tax, where the property is not your principal place of residence. WA assesses this annually on the unimproved value of land you hold
- Vacancy allowance. Even in a tight rental market, assume some weeks without a tenant rather than 52 weeks of rent
Mortgage interest is usually excluded from net yield and handled separately, because yield is a property-level measure and interest is a function of how you funded it. Whichever convention you use, apply it consistently across every property you compare.
The ATO’s guidance on residential rental properties covers which rental income must be declared and which expenses are deductible. Deductibility and yield are different questions, and an expense being deductible does not stop it reducing your return.
Worked example: gross and net yield on a Perth unit
Taking the median Perth unit as the base and applying a conservative cost set, the net figure lands well below the gross.
| Line | Amount |
|---|---|
| Purchase price | $690,000 |
| Weekly rent | $700 |
| Annual rent (52 weeks) | $36,400 |
| Gross yield | 5.28% |
| Less vacancy allowance (2 weeks) | −$1,400 |
| Less strata levies, rates and insurance (illustrative) | −$6,500 |
| Less management fees and maintenance (illustrative) | −$3,200 |
| Net annual income | $25,300 |
| Net yield on purchase price | 3.67% |
The price and rent are REIWA medians as at 22 September 2026. The cost lines are illustrative placeholders for the arithmetic, not figures for any actual property. Strata levies in particular vary enormously between schemes, and a building with a lift, a pool or a gym will sit far above one without. Get the real numbers from the strata company, the rates notices and a property manager before you rely on any of this.
The shape is the point: roughly a third of the gross yield disappeared into ordinary holding costs, before any finance. That is normal, and an investment case built on the gross figure alone is built on the wrong number.
What is a good rental yield in Perth?
There is no single threshold, because yield trades off against capital growth and against risk. A property with an unusually high yield is usually telling you something about its growth prospects, its condition or its location.
How to read a yield figure sensibly:
- Compare like with like. House against house, unit against unit, similar age and similar area.
- Compare against the current medians, which is what the table above is for.
- Ask why an outlier is an outlier. A yield well above the median for its type usually reflects lower land content, a less established location, higher strata costs elsewhere in the sums, or a property that will need work.
- Weigh it against total return. Yield plus capital growth, less costs, is what you actually earn. A 4 per cent yield in a suburb with strong long-term demand can outperform a 6 per cent yield somewhere with none.
- Recalculate as values move. Yield falls as the property’s value rises, even though nothing about the property has changed. That is arithmetic, not underperformance.
For a sense of how demand varies across the riverside south, see our Perth suburbs pages.
What does rental yield not tell you?
Yield measures income against value at a point in time. It says nothing about growth, risk, liquidity, tax position or the quality of the asset.
What it leaves out:
- Capital growth, which for most Australian residential investors is the larger component of total return over time.
- Tax. Depreciation, deductions and your marginal rate all change the after-tax outcome, and none of them appear in a yield figure.
- Tenant and vacancy risk, and how quickly this property type re-lets in its area.
- Capital expenditure ahead. A scheme facing a major works programme, or a house needing a roof, has a cost coming that no yield calculation shows.
- Selling costs and timing, if you may need to exit.
- Scheme restrictions. By-laws affecting letting, pets or short stays can materially change what a property earns.
If the property is currently tenanted and you are considering selling it, the tenancy itself becomes a factor in the sale. Our guide to selling a tenanted property in WA covers what that involves.
Frequently asked questions
What is the formula for rental yield?
Gross rental yield is weekly rent multiplied by 52, divided by the property value, multiplied by 100. Net rental yield subtracts annual holding costs from the annual rent first, and may also add purchase costs to the denominator.
Should I use gross or net rental yield?
Use gross for quick comparisons between properties and net for any actual decision. Net yield reflects rates, strata levies, insurance, management, maintenance, land tax and vacancy, which together commonly absorb a substantial share of the gross figure.
What is the current rental yield in Perth?
Calculated from REIWA’s Perth metro medians as at 22 September 2026, the gross yield on a median house is about 4.1 per cent and on a median unit about 5.3 per cent. These are metro-wide medians and will not match a specific property.
Do units really yield more than houses in Perth?
On the current metro medians, yes. A median unit costs roughly $270,000 less than a median house while renting for only about $50 a week less. Houses generally carry more land content, which is the trade against the lower yield.
Does rental yield include mortgage repayments?
Usually not. Yield is a property-level measure, and finance costs depend on how you funded the purchase. Model cash flow separately, and keep the convention consistent across every property you compare.
Is land tax included in rental yield?
It should be in a net yield calculation, because WA land tax applies annually to land that is not your principal place of residence. It is assessed on the unimproved value of all land held by the same owners.
Run the numbers on the property, not the median
Medians are a benchmark. The decision is made on the actual strata levies, the actual rates, the actual achievable rent and the actual condition of the property in front of you. Getting those numbers before you offer is considerably cheaper than discovering them afterwards.
See our apartments and investment overview, or look at what is currently available across Perth’s riverside south suburbs.
Call Brian on 0418 896 354 or email brianmcallister@theagency.com.au. Seven days, by appointment.
This article is general information for Western Australia and is not financial, taxation or investment advice. The cost figures in the worked example are illustrative placeholders, not figures for any actual property. Market data is as at the dates stated and is revised over time. Obtain advice from your accountant, financial adviser and property manager before investing.