The Finance Algorithm
§ Tool · tier 2 · independent

Commercial Property Yield Calculator.

Calculate the rental yield and return on investment for commercial property. Compare net yield, cap rate, and cash-on-cash return.

Live dataFree, no signupOn-deviceLiveupd May 2026
Inputs
Your numbers
$
$1.2M

The purchase price of the commercial property

$
$90k

Total annual rent from all tenants (before expenses)

$
$15k

Council rates, insurance, maintenance, management fees (non-recoverable from tenant)

$
$60k

All acquisition costs on top of the purchase price

$
$800k

The commercial mortgage amount

%
6.5%

Commercial loan rates typically range from 6-8%

Lease structure affects your true net income

Math updates live as you change inputs · AI runs on submit

Awaiting inputs

Move the sliders or type in the form on the left — the math updates live as you go. Click Get AI verdict when you want a written analysis.

Commercial property can generate significantly higher yields than residential — typically 5-8% net compared to 2-4% for residential. But commercial investing also comes with higher risk: longer vacancy periods, more complex leases, and larger capital requirements. 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.

§ Worked examples

Real-world scenarios

Office Space — Net Lease

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.

Retail Shop — Gross Lease

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.

§ FAQ

Questions Australians ask

§ Glossary

Plain-English definitions

Cap Rate (Capitalisation Rate)
Net operating income divided by property value. Measures the return independent of financing. Also called net yield in Australian markets.
Cash-on-Cash Return
Annual cash flow (after debt service) divided by the total cash invested (deposit + purchase costs). Measures the return on YOUR money, not the property's total value.
WALE (Weighted Average Lease Expiry)
The average remaining lease term across all tenants, weighted by the rental income each tenant contributes. A longer WALE means more secure income.
Net Lease
A lease structure where the tenant pays some or all of the property outgoings (rates, insurance, maintenance) in addition to base rent. Reduces the landlord's expense risk.