South Africa 2026
This rental yield calculator works out the gross and net return on any South African investment property. Enter the purchase price, monthly rent, and all expenses to see your annual net income, payback period, and how your yield compares to the prime rate and long-run equity returns.
Total cost paid for the property
Expected gross monthly rental income
Municipal rates payable by landlord
Sectional title levy; 0 for freehold
Building insurance (contents insurance is tenant's)
Typical 5-10% - empty periods between tenants
Property manager fee as % of rent (typically 8-10%)
Moderate yield - net rental yield
5.20%
Gross yield: 9.50% - annual net income: R 62,436
Gross yield
9.50%
Monthly net income
R 5,203
Annual net income
R 62,436
Payback period
19.2 yrs
| Gross monthly rent | R 9,500 |
| Vacancy loss (5%) | -R 475 |
| Rates & taxes | -R 1,200 |
| Body corporate levy | -R 1,500 |
| Insurance | -R 400 |
| Management fee (8%) | -R 722 |
| Monthly net income | R 5,203 |
Prime rate
10.5%
Below this
Risk-free bond saving
Inflation (est.)
5.0%
Yield beats this
Typical SA CPI target
SA equities (long-run)
11.0%
Below this
JSE avg before tax
Gross yield is calculated before any expenses - it tells you the maximum possible return if the property was fully occupied and cost nothing to maintain. It is useful for quick comparisons between properties but it overestimates real performance.
Net yield accounts for all costs: rates, levies, insurance, management fees, and vacancy. This is the number that determines whether your property generates positive cash flow and how it compares to alternative investments like equities or bonds.
A property with a 9% gross yield might only deliver a 5.5% net yield after a 15% vacancy rate, 10% management fee, R1,500/month in levies, and R1,000/month in rates and insurance. Always work with net yield when making investment decisions.
Every rental property will have some vacancy: time between tenants, refurbishment after a tenant leaves, or periods where no suitable tenant can be found. A realistic allowance for a well-managed residential property is 5-10% per year - roughly 3-6 weeks of empty time annually.
In high-demand areas (close to universities, hospitals, business nodes) vacancy can be below 5%. In slower markets, 10-15% is more realistic. Furnished short-term rentals (Airbnb-style) can have higher vacancy but also higher nightly rates.
Vacancy is applied before management fee in this calculator - the management fee is calculated on effective rent (after vacancy) since the manager only earns a fee when the property is tenanted.
Rental income in South Africa is taxable at your marginal income tax rate (up to 45% for high earners). You must declare rental income in your annual tax return. The good news: most property expenses are deductible against rental income, which substantially reduces the taxable amount.
Deductible expenses include: bond interest (not capital repayment), rates and taxes, levies, insurance, management fees, repairs and maintenance, and reasonable wear-and-tear depreciation on assets.
Not deductible: capital improvements (these form part of the base cost for CGT purposes), your own labour for repairs, and the capital portion of bond repayments. Consult a tax professional for your specific situation, especially if you own multiple properties.
When you eventually sell, capital gains tax (CGT) applies to the profit at an effective rate of up to 18% for individuals (after the annual exclusion of R40,000). Properties used exclusively for rental do not qualify for the primary residence exclusion.
vs Prime (10.25%): If your net yield exceeds prime, your property generates more from rent alone than the cost of borrowing. This means positive leverage - the bank's money is working in your favour. Most residential properties fall short of prime on a net basis.
vs Inflation (~5%): If your net yield exceeds CPI inflation, your rental income is growing your real purchasing power. A yield below CPI means your investment income is losing ground to inflation in real terms.
vs Equities (~11%): The JSE has historically returned about 10-12% per year before tax over long periods. Most rental properties yield below this on a pure income basis - the thesis for property is that yield + capital appreciation + leverage = competitive total return. Property also has lower volatility than equities and provides a tangible asset.
A gross rental yield of 8-10% is generally considered strong in South Africa. Net yield (after all expenses) of 5-7% is typical for residential property in major metros. In coastal and sought-after suburbs, yields are often lower (5-7% gross) because prices are high relative to achievable rents.
Gross yield is annual rental income divided by the purchase price - before any expenses. Net yield deducts all costs (rates, levies, insurance, management fees, vacancy) before calculating the return. Net yield is the number that matters for assessing real investment performance.
Gross yield = (monthly rent x 12 / purchase price) x 100. Net yield = ((annual rent - annual expenses) / purchase price) x 100. This calculator does both automatically when you enter your rent, expenses, vacancy, and management fee.
When net yield exceeds prime (currently 10.25%), your unleveraged property return beats the cost of borrowing - a sign of a well-priced investment property. Most residential properties currently yield below prime on a net basis, which means you need capital appreciation to make the numbers work.
Include municipal rates and taxes, body corporate levies (sectional title only), property management fees (typically 8-10% of rent), building insurance, a vacancy allowance (5-10% is standard), and a maintenance reserve (not in this calculator - add 0.5-1% of property value per year as a rule of thumb).
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