Yield-Based Purchase Price Calculator
Think in yield, not price — work backwards from the return you want to the price you should pay for a tenanted property
The property and its tenant
What the sitting tenant pays now — $33,800 per year.
How long today's rent is locked in before it can be reviewed.
At lease expiry
The tenant either renews at a modest uplift, or you re-let at market after a changeover void. We blend the two by how likely a renewal is.
Weeks empty between tenants — only incurred on the re-let path.
A structural allowance for the odd empty week each year, applied to the stabilised rent.
The yield you want
Sets the width of the price range.
Purchase price range
$654,909–$723,847
At a 5.00% gross yield on price, pay about $687,654.
Stabilised gross income
$34,383/yr
The reversion rent after renewal/re-let and ongoing vacancy — what we capitalise.
Day-one yield at that price
4.92%
What today's rent yields on price — usually below your target until the rent reverts.
After the expected void
$686,835
Knock $819 off for the changeover void you're likely to wear.
Capitalising today's rent instead would suggest $676,000. The gap is the reversion and vacancy risk your yield thinking prices in.
Bought it? Track what it actually earns.
Akweno tracks gross and net yield against what you actually paid — so you can see whether the yield you bought on is the yield you're getting.
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Price is just a yield, inverted
The price you can pay falls as the yield you demand rises. The shaded band is your target yield give-or-take 0.25points — the price range above. The teal line capitalises the stabilised income; the dashed line, today's passing rent.
Why buy on yield instead of price?
An asking price is a claim. A yield is a decision. Working backwards from the return you need turns a negotiation into arithmetic — and stops a headline price from setting your expectations for you.
The relationship
Price = income ÷ yield
Every purchase price is really an income and a yield in disguise. Fix the income and the yield you'll accept, and the price falls out. The only judgement left is which income to use — and that's where most buyers go wrong.
Passing vs stabilised
Stabilised = blended reversion − vacancy
Passing rent is what the sitting tenant pays today. Stabilised rent is what the property earns once the lease rolls off — a blend of renewing and re-letting, less an allowance for the weeks it sits empty. Capitalising the stabilised figure is what stops you overpaying for a lease that's about to expire.
A worked example
A tenant pays $650 a week — $33,800a year. You think there's a 60% chance they renew at 3% more, and if they don't you'll re-let at 5% more after three weeks empty. Blend those, take off a 2% ongoing vacancy allowance, and the stabilised rent is about $34,383. Demand a 5% yield and you should pay roughly $687,650 — accept a quarter-point either side and the sensible range is $654,900 to $723,850. Note the day-one yield on today's rent is only 4.9%: you're paying for the rent it will earn, not the rent it earns now.
What this model does and doesn't do
- It's a pricing lens, not a valuation. It tells you what a price implies about your return — not what a bank or valuer will say the property is worth.
- It's pre-tax and pre-finance. Yield measures the property, not your loan or your marginal rate — the cash flow and gearing calculators cover those.
- Capital growth sits outside it entirely. A lower yield can still be the right buy if the growth case is strong; this just makes the income trade-off explicit.
- The renewal blend is your judgement, not a forecast. The point is to see how sensitive the price is to it — nudge the renewal chance and watch the range move.
Once you own it, Akweno tracks the yield you actually achieve against the price you paid, across your whole portfolio — so the yield you bought on doesn't quietly drift away from the yield you're getting. Start free.
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Buy on yield. Track it forever.
Akweno tracks gross and net yield for every property against what you actually paid — so you always know whether the return you bought on is the return you're getting.
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