Net Initial Yield Calculator
Enter the price, the rent and any costs you cannot pass to the tenant. The tool adds the costs of buying and shows the net initial yield.
Ce contenu est en anglais.
This is an estimate and not advice. Stamp duty is worked out at the non-residential rates for England and Northern Ireland, and VAT is charged at 20% on the fees.
Exemples détaillés
A £1,000,000 unit let at £65,000
Price £1,000,000, rent £65,000, costs estimated
6.15% net initial yield
Purchaser costs are £57,500, so the price plus costs is £1,057,500. The gross yield is 6.5%.
A £2,000,000 office let at £140,000
Price £2,000,000, rent £140,000, £6,000 not recoverable
6.30% net initial yield
Purchaser costs are £125,500, so the price plus costs is £2,125,500.
À propos de Net Initial Yield Calculator
Net initial yield, often shortened to NIY, is the standard way to compare commercial investment properties. It is the rent you receive on day one, after taking off the running costs that the landlord cannot pass on to the tenant, divided by the price of the property plus the costs of buying it. It tells you the return you start with, before rent reviews, empty periods and any rise or fall in value.
The costs of buying matter because they add a good deal to the price. Stamp duty, the agent's and solicitor's fees and the VAT on those fees often come to between 5% and 7% of the price. This calculator can work out those costs from the price, using the non-residential stamp duty rates for England and Northern Ireland, or you can type your own percentage. It also shows the gross yield on the price alone and the number of years of rent it takes to repay the whole cost.
Comment utiliser Net Initial Yield Calculator
- Enter the purchase price and the annual rent you receive today.
- Add any yearly costs you cannot pass on to the tenant, such as insurance or service charge on empty space.
- Choose to estimate the purchaser costs or type a percentage.
- Read the net initial yield, the gross yield and the years of rent needed to repay the cost.
Usages courants
- Comparing two shops, offices or industrial units
- Checking the yield quoted by an agent
- Deciding what price to offer to reach a target yield
- Seeing how much buying costs reduce the return
Sources
Dernière vérification le 18 octobre 2026.
Questions fréquentes
How is net initial yield calculated?
Take the annual rent, subtract the yearly costs the landlord cannot recover from the tenant, and divide the result by the purchase price plus the costs of buying. Multiply by 100 to show it as a percentage.
What is the difference between net and gross yield?
Gross yield is the rent divided by the price alone. Net initial yield also deducts the costs the landlord cannot recover and adds the costs of buying to the price, so it is lower and gives a truer picture of the return.
What are purchaser costs?
They are the extra costs of buying: stamp duty, the agent's fee, the solicitor's fee and VAT on those fees. They are often quoted as a single percentage of the price, commonly around 6% to 7% for larger deals.
What is a good net initial yield?
It depends on the type, quality and location of the property and the length of the lease. A higher yield means more rent for the price, but it often comes with more risk, such as a short lease or a weaker tenant.
What are years purchase?
Years purchase is one divided by the yield. A net initial yield of 6.25% is 16 years purchase, which means the rent repays the price plus costs in 16 years if it stays the same.