Rental yield: the number everyone quotes and most misuse

Q: What's a good rental yield in NZ right now?

Typically 4-5% gross in main centres; judge by net yield and stress tests, not the headline.

Q: Is negative cashflow always bad?

Not inherently — but you must know the weekly cost and survive rate rises.

Q: What does the analysis include?

Full metric ladder, IRR scenarios, risk flags and follow-up chat. First free.

Gross yield is easy to calculate and easy to be fooled by. Here's the whole ladder, and where deals actually live or die.

Gross yield: the headline

Annual rent ÷ purchase price. A $650k property renting at $620/wk grosses about 5.0%. Useful for a ten-second screen between suburbs — and that's all, because it ignores every cost of actually owning the thing.

Net yield: where reality starts

Subtract rates, insurance, maintenance, property management and vacancy allowance before dividing. Those typically strip 1.5–2.5 percentage points from gross — a '6% yield' property netting 3.8% is normal, not scandal. Net yield is the number to compare against what your deposit would earn elsewhere.

Cash-on-cash: the investor's truth

Because you buy with leverage, the return on your actual cash is what compounds: after-mortgage cashflow ÷ deposit and costs in. With today's rates many NZ purchases are cashflow-negative — you're paying weekly to hold the asset, betting on growth to repay you. That can be a legitimate bet, but it should be a calculated one: know your weekly top-up, your break-even rent, and what happens at +1% and +2% interest.

Run the whole ladder in one go

Deal Analyser computes all of it deterministically — yield ladder, weekly cashflow, break-even rent, rate stress tests, and 10-year IRR under three growth scenarios — then a commentary on the deal's real strengths and risks. The arithmetic is exact, not AI-guessed. First analysis free.

Got a deal in front of you?

Paste the numbers and get the full ladder — cashflow, break-even rent, rate stress, 10-year IRR under three growth scenarios — computed exactly, with an honest verdict. First analysis free.

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FAQ

What's a good rental yield in NZ right now?

Context beats thresholds: gross 4–5% is common in main centres, higher in regions with flatter growth prospects. A 'good' yield is one that survives net costs and rate stress on your numbers.

Is negative cashflow always bad?

No — it's a growth bet with a weekly price tag. It's only bad when the buyer doesn't know the size of the tag or can't sustain it through a rate rise.

What does the analysis include?

Every metric above plus IRR scenarios and due-diligence flags, computed from your actual numbers — with a chat to interrogate it afterwards. First one free.

General information, not legal advice for your specific situation.

More NZ property tools: NZ Property Evaluator · Reno ROI · NZ Tenancy Answers · Staged.studio