The following formula shows how to calculate rental yield by taking into all costs that are often overlooked.

Rental yield in % = (Net Annual Rent Collected / Total Cost of Property) x 100 %

(Net Annual Rent Collected = Total Rent Collected - maintainence cost, property tax, property agent cost, income tax, vacant cost etc)

(Total Cost of Property = Price of Property + Stamp Duty + Legal fees + Renovation + furnishing)

Example:-
If you bought a property for $460,000 (inclusive of all costs),
you rent it for $2800/month
and your monthly maintainence is $100,
agent fee is 1 month's rent,
amortised furnishing cost is $2000/year (i.e. you spend $20k on furnishing and expect it to last for 10 Years so amortised cost= $20,000/10 years),
property tax (10% of annual value) is $3360,
and assuming other costs to be negligible, we have:

Net Annual Rent Collected in $ = $2800x12 - ($100x12 + $2800 + 2000 + $3360) = $24,240

Rental Yield = ($24,240 / $460,000) x 100 = 5.27%