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Rental Yield Calculator

Evaluate the profitability of a rental property by calculating both gross and net rental yields. Enter the property value, monthly rent, and annual expenses to determine your return on investment. Rental yield is a key metric for comparing investment properties and making informed real estate decisions.

How to Use

1 Enter the property purchase price or current market value.
2 Input the monthly rental income you receive or expect to receive.
3 Add all annual expenses including insurance, maintenance, property management fees, and taxes.
4 Review both gross and net yield to evaluate the property investment.
5 Compare yields across different properties to find the best investment.

Formula

Annual Rental Income monthly_rent × 12
Gross Yield (annual_rental_income / property_value) × 100
Annual Net Income annual_rental_income - annual_expenses
Net Yield (annual_net_income / property_value) × 100

Example: Investment Property Analysis

A property worth $200,000 renting for $1,500/month with $3,000 annual expenses: Annual rental income = $18,000, Gross yield = 9%, Net income = $15,000, Net yield = 7.5%. This is a solid rental yield in most markets.

Why It Matters

Rental yield is the primary metric real estate investors use to evaluate property profitability. A higher yield indicates a better return on investment. Understanding both gross and net yield helps you account for all costs and make realistic investment comparisons. Markets with yields above 5-6% are generally considered good for rental investments.

Who Uses This Calculator?

  • • People comparing loan, mortgage, salary, savings, tax, or investment scenarios before making a money decision.
  • • Homeowners, borrowers, employees, freelancers, and small business owners who need fast estimates without a spreadsheet.
  • • Anyone who wants to understand the inputs, formula, and tradeoffs behind a financial result.

Frequently Asked Questions

What is a good rental yield?
A good gross rental yield is typically 5-10% or higher, depending on the market. Net yields of 4-8% are generally considered good. Urban areas tend to have lower yields but better appreciation, while suburban/rural areas may offer higher yields but slower growth.
What expenses should I include?
Include property insurance, property taxes, maintenance and repairs (typically 1% of property value/year), property management fees (8-12% of rent), vacancy allowance (5-10% of rent), HOA fees if applicable, and any utilities you pay as the landlord.
What is the difference between gross and net yield?
Gross yield is the annual rental income divided by property value, without accounting for expenses. Net yield subtracts all operating expenses from rental income before dividing by property value. Net yield gives a more accurate picture of actual profitability.
Should I factor in mortgage costs?
This calculator shows yield before financing costs. When evaluating with a mortgage, consider your cash-on-cash return instead, which divides net income by the total cash invested (down payment + closing costs + any initial repairs). This gives a better picture of leveraged returns.

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This calculator provides estimates for informational purposes only and is not financial, tax, or legal advice. Consult a qualified professional before making financial decisions.