Calculator
Work out the yield on a tenanted asset
Quit rent, assessment, insurance, maintenance and management for the year. Leave empty for gross yield only.
Gross rental yield
4.80%
Yield on the purchase price before financing and vacancy. For a fuller picture, add acquisition costs to the price and be realistic about void periods between tenancies.
Reading the result
Yield is a price for risk
Two industrial properties with the same rent can deserve very different prices. A modern warehouse on a long lease to an established logistics operator trades at a lower yield than a dated factory between tenants, because the market prices the security of the income, not just its size. When a yield looks unusually generous, the question is what risk it is paying you to carry - a short lease, a specialised building, or capital expenditure waiting in the roof.
For a fuller acquisition picture, add stamp duty and legal fees to the purchase price before computing the net figure - the stamp duty calculator gives you those numbers in one pass.
Add acquisition costs to the pictureTest it on live stock
Compare against asking yields today
The most reliable benchmark is the current market itself. Browse factories and warehouses for sale in the corridor you are targeting, take their asking prices and realistic rents, and run them through this calculator to see where your deal sits.
Questions
Rental yield, answered
What is the difference between gross and net rental yield?
Gross yield is the annual rent divided by the purchase price, before any costs. Net yield deducts the outgoings you carry as landlord - quit rent, assessment, insurance, maintenance and management - before dividing by the price. Net yield is the honest number for comparing an industrial investment against other assets, because outgoings vary widely between properties.
What outgoings should I include for an industrial property?
Typical landlord costs are quit rent and assessment, fire and public liability insurance, upkeep of the roof, structure and compound, and any management or agency fees. On many industrial tenancies the tenant carries utilities and day-to-day servicing, so the landlord's outgoings are lower than for commercial offices - but roof and structural repairs on an older factory can be substantial, so budget honestly.
Does rental yield account for my loan repayments?
No. Yield measures the property's unleveraged income return, which keeps comparisons clean between properties and against other investments. Financing changes your cash-on-cash return, not the yield itself. If you finance the purchase, run the loan calculator alongside this one and compare the monthly instalment against the rent to see the cashflow position.
How do I judge whether a yield is good for industrial property?
Compare like with like: similar building type, tenure, location and tenant strength. A long lease to a strong covenant on a modern warehouse commands a lower yield than a short tenancy on an aging factory, because the income is more secure. Rather than anchoring to a single benchmark figure, compare the asking yields of current listings in the same corridor - our listing pages show asking prices and rents you can test directly.
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