Property Yield vs Term Deposit Calculator NZ
This calculator compares the income return from an investment property against a term deposit, on a like-for-like, after-cost basis, so you can see which puts more cash in your pocket each year before tax and before any capital growth. Rental property is often assumed to be the better investment, but once rates, insurance, maintenance and property management are stripped out, the income return alone can lag a simple term deposit, and this tool lets you check rather than guess. You enter the property price, the weekly rent, your annual running costs, and the term deposit rate you are comparing against. The calculator works out your net rent for the year, expresses it as a net rental yield, a percentage of the property price, and sets that alongside the term deposit rate to show which delivers the higher income return, along with the net rent figure in dollars. Using net rather than gross yield accounts for the real costs of owning a rental, giving a fairer picture than a headline yield figure. Remember this only measures income return: property can also gain value over time and lets you use leverage, while a term deposit is simpler and lower effort, and both are taxable. Use the result alongside your own capital growth expectations rather than as the whole investment decision, and treat the figures as an estimate rather than financial advice.
This compares income return only. Property also offers potential capital growth and can use leverage, while a term deposit is simpler and lower effort. Both are taxed. Net yield uses rent less running costs, which is fairer than gross. Estimate only, not financial advice.
How it works
The calculator works out your net rental yield as the annual rent less running costs, divided by the property price, as a percentage. It compares that against the term deposit rate you enter. This is a like-for-like income comparison, before tax and before any capital growth on the property, which lets you see how the property income return stacks up against a simple, low-effort alternative.
Worked example
A $700,000 property renting at $650 a week earns $33,800 a year. Less $9,000 of costs, the net rent is $24,800, a net yield of about 3.5%. Against a 5% term deposit, the deposit gives a higher income return, though the property may also gain in value over time, which this does not count.
Related calculators
- Rental Yield and Investment Calculator: rental returns.
- Term Deposit Calculator: deposit returns.
- Investment Property Cashflow Calculator: rental cash flow.
- Rentvesting Calculator: rent and invest.
- Term PIEs vs Term Deposits: background on this topic.
- Cap Rate Calculator NZ: Work out the capitalisation rate on a rental from its net operating income and value.