Rental Yield Calculator

Calculate the gross and net rental yield of an investment property. Enter purchase price, monthly rent, and annual expenses to instantly see your rental return percentage.

What is Rental Yield Calculator?

A rental yield calculator measures the annual return a rental property generates relative to its purchase price, expressed as a percentage. It's one of the fastest ways to screen investment properties and compare opportunities across different markets, price points, and rent levels.

Rental yield comes in two forms: gross yield, which simply divides annual rent by property price, and net yield, which subtracts operating expenses first for a more accurate picture of your true return. Savvy real estate investors always check both figures, since a property with an attractive gross yield can turn mediocre once property taxes, insurance, maintenance, and management fees are factored in. This calculator gives you both numbers instantly, letting you quickly compare multiple properties side by side.

Formula

Gross Rental Yield = (Annual Rental Income ÷ Property Price) × 100

Net Rental Yield = ((Annual Rental Income − Annual Expenses) ÷ Property Price) × 100

How to Calculate

Enter the property's purchase price.
Input the expected or actual monthly rental income.
Add your estimated annual operating expenses (tax, insurance, maintenance, management).
View your gross yield, net yield, and monthly/annual net income instantly.

Example

A $300,000 property renting for $1,800/month ($21,600/year) with $4,000 in annual expenses: Gross yield is 7.2% ($21,600 ÷ $300,000). Net yield is 5.87% (($21,600 − $4,000) ÷ $300,000), giving you $17,600 in annual net income, or about $1,467 per month.

Key Benefits

Instantly compare gross and net rental yield
See your monthly and annual net income clearly
Quickly screen multiple properties for investment potential
Understand exactly how expenses reduce your true return

Common Mistakes to Avoid

Using gross yield alone without subtracting expenses
Forgetting property management and vacancy costs
Comparing yields across markets with very different risk levels

Pro Tips

Always calculate net yield, not just gross yield
Budget realistically for vacancy and maintenance
Compare yield against local market averages before buying

Key Terms Explained

Gross Yield: Annual rent divided by property price
Net Yield: Gross yield minus operating expenses
Operating Expenses: Tax, insurance, maintenance, management costs
Cap Rate: Similar metric based on net operating income

Common Use Cases

Screening potential rental properties before making an offer
Comparing rental yield across different cities or neighborhoods
Evaluating whether a property's asking price is justified by its rent
Tracking yield changes as rent or property value shifts over time

Frequently Asked Questions

What is a good rental yield for an investment property?

Gross rental yields between 5% and 8% are generally considered solid for residential property, though this varies significantly by market. High-growth, expensive urban markets often show lower yields (3-5%) since property prices outpace rents, while more affordable regional markets can offer 8-10%+ yields.

What's the difference between gross yield and net yield?

Gross yield divides your annual rental income by the property price, ignoring expenses. Net yield subtracts annual operating expenses (property tax, insurance, maintenance, management fees, vacancy costs) first, giving a more realistic picture of your actual return. Net yield is always lower and is the more important number for real investment decisions.

What expenses should I include when calculating net rental yield?

Include property taxes, landlord insurance, maintenance and repairs, property management fees (typically 8-12% of rent if you use a manager), HOA fees, and an allowance for vacancy periods. Excluding these expenses is one of the most common mistakes new real estate investors make when evaluating a property.

Should I factor in mortgage payments when calculating rental yield?

Rental yield traditionally measures return on the property's total value, independent of financing, which lets you compare properties on equal footing regardless of how they're financed. For your actual cash-on-cash return (accounting for your mortgage and down payment), use a dedicated cash-on-cash return or rental cash flow calculator instead.

How does rental yield compare to other investment returns?

Rental yield alone (5-8% typically) is often lower than long-term stock market average returns (7-10%), but real estate also offers potential price appreciation, tax advantages like depreciation, and leverage benefits from mortgage financing that can significantly boost your total return beyond the yield percentage alone.