Quick Answer: Rental yield is annual rent as a percentage of purchase price. In NZ's 2026 market, gross yields of 4-5% are common in main centres, while regional properties can return 6% or more - though yield alone doesn't account for costs, so net yield and cashflow matter just as much.
Gross Yield vs Net Yield
Gross yield is the simplest calculation: annual rent divided by purchase price, multiplied by 100. A property that rents for $30,000 a year and cost $600,000 has a 5% gross yield. It's a quick way to compare properties, but it ignores costs entirely.
Net yield is more realistic: it subtracts rates, insurance, maintenance, property management fees, and any body corporate costs from the annual rent before dividing by purchase price. Net yield is almost always lower than gross yield, sometimes by 1-2 percentage points, and is the figure that actually reflects what lands in your pocket.
4-5%
6%+
1-2 points lower
Common Questions, Answered
Quick Summary
- Gross yield is a quick comparison tool, but doesn't reflect real returns.
- Net yield subtracts real costs and is the more honest number to work from.
- 4-5% is typical in main centres, with regional properties sometimes exceeding 6%.
- Yield and capital growth are separate metrics - weigh both before deciding.