Calculate the rental yield and return on investment for commercial property. Compare net yield, cap rate, and cash-on-cash return.
Updated October 2026Built and checked by MaverickHow it's calculatedReport an error
Net yield / cap rate
6.79%
Gross 7.50%
Cash-on-cash
7.28%
$33,500 cash flow
Net income
$85,500
$4,500 outgoings
LVR
66.7%
$460,000 cash in
Net cash flow is what you actually pocket after outgoings and loan interest. The bigger that slice, the stronger the asset.
Commercial vacancies can run 6-12 months. Stress test the yield at 10-25% vacancy: if the numbers still work, the yield isn't relying on a full building.
Triple-net and net leases transfer outgoings to the tenant: significantly more attractive for landlords than gross leases.
Commercial property is valued largely on the income it produces, so yield is the starting point. It also comes with different risks from residential: vacancies can last longer, leases are more complex, and lenders generally lend less against it. This calculator analyses your commercial property's gross yield, net yield, capitalisation rate, and cash-on-cash return to help you evaluate whether the investment stacks up.
A small office suite purchased for $850,000 with $45,000 in purchase costs. Net lease at $65,000/year. Loan: $550,000 at 6.5%.
Gross yield: 7.65%. Net yield (cap rate): $65,000 ÷ $895,000 = 7.26%. Annual loan interest: $35,750. Cash flow (rent - interest): $29,250/year. Cash invested: $345,000. Cash-on-cash return: 8.48%: significantly better than residential.
A retail shop for $1.5M. Gross rent: $120,000/year. Landlord-paid outgoings: $25,000/year.
Gross yield: 8%. Net income: $95,000. Net yield: 6.33%. While the gross yield looks attractive, the outgoings reduce it meaningfully. Consider negotiating a net lease on renewal to transfer outgoings to the tenant.