Best Cities to Invest in Rental Property: Yield Report for the US, UK and Australia

Report updated October 2026 · By the MortgageCompass Editorial Team · How we research

The best cities for rental income are rarely the famous ones. Across the latest data from Zoopla in the UK, Cotality in Australia and ATTOM in the US, the highest gross rental yields are in lower-priced cities and counties such as Sunderland, Darwin and Cook County, Illinois, while expensive markets like London, Sydney and California’s Bay Area yield the least. But a high yield is not automatically a good investment. This report sets out the numbers, lets you sort and filter them, and explains what they leave out.

Five findings from the data

1. Yields are highest where prices are lowest. In the UK, Sunderland, Aberdeen, Dundee and Hull all show gross yields of 8% or more, with average buy-to-let prices around £85,000 to £120,000. London, Oxford and Cambridge sit at about 5% or less.
2. Australia’s capitals mostly yield under 4.5%. Darwin is the clear exception at 6.5%. Sydney, at 3.4%, has the lowest gross yield of the capitals.
3. In the US, the Midwest and some large metros lead. Among counties with more than a million people, Suffolk County, New York, Cook County, Illinois, and Cuyahoga County, Ohio, top ATTOM’s list, while Santa Clara County, California, is at the bottom at 3.1%.
4. High yield and growth can go together, but often do not. Darwin combined the highest yield with values up 11.9% over the year to September 2026. Sydney had a low yield and values down 7.0%.
5. Most gross yields do not beat today’s borrowing costs once expenses are included. With investor rates around 6% to 7% in all three countries, a property needs a net yield, not a gross one, close to that level for borrowing to help the return.

Explore the numbers

What a yield ranking does not tell you

Costs. Gross yield ignores running costs, which can easily take a third to half of the rent. Older housing in high-yield areas often needs more maintenance. Our guide to calculating rental yield shows how to get from the gross figure to what you actually keep.

Growth. Rental yield measures income, not the change in value. Some lower-yield cities have delivered stronger price growth over time, and some high-yield areas have seen values stagnate. Look at long-term price and population trends, not just one year.

Demand and risk. A high yield can reflect weaker demand, higher vacancy or a narrower local economy. Check local vacancy rates, employment and how quickly similar properties let.

Rules and taxes. Landlord licensing, rent regulation, short-stay limits and the tax treatment of mortgage interest differ by country and city, and can change the return a great deal. For holiday lets, see our short-term rental guide.

Where is Canada?

We have not included Canadian cities because there is no single, regularly published source of city-level gross yields that is comparable with the data above. As a rule, yields in Toronto and Vancouver are low because prices are high relative to rents, while cities such as Edmonton and Calgary are generally considered higher-yielding. Check rents from CMHC’s rental market reports against local prices, and see our guide to mortgage rates in Canada for borrowing costs.

How to use this report

1. Shortlist two or three areas that fit your budget and the yield you need.
2. Check real rents for the exact property type, not area averages.
3. Work out the net yield and cash flow with your own mortgage rate and costs.
4. Visit, or speak to local agents, before you commit.

Data sources and method

Gross yield is the annual rent divided by the purchase price. Each dataset uses its own method, so compare places within a country rather than across countries. Australia: Cotality Home Value Index, dwelling values and gross yields to 30 September 2026. UK: Zoopla, average buy-to-let prices and rents, with data to September 2025, published March 2026. US: ATTOM 2026 Single-Family Rental Market Report, potential gross yields on three-bedroom homes, published March 2026.

Sources

• Cotality: Home Value Index, October 2026
• Zoopla: The highest yielding areas for buy-to-let property in the UK
• ATTOM: 2026 Single-Family Rental Market Report

This report is for informational purposes only and is not investment advice or a recommendation to buy in any location. Yields are gross, before costs and tax, and can change quickly. Do your own research and speak to a qualified adviser before investing.