Rental Yield Calculator
Rental yield is the annual return from a rental property as a percentage of the property's price. There are three common measures: gross yield (just rent / price, ignoring expenses), net yield (after operating expenses), and cash yield (after mortgage). Gross yield is the quick number used in listings; net yield is what really matters for evaluating investments. Most successful rental investors target 6%+ net yield.
houseProperty Details
For cash yield calculation
analyticsYields
tips_and_updates Tips
- • Always look at net yield, not gross — gross misleads
- • 8%+ net yield is excellent; 6-8% good; 4-6% fair; under 4% poor
- • Operating expenses run 25-50% of gross rent depending on property
- • Net yield > mortgage rate = positive cash flow with leverage
- • High net yield often comes with higher risk markets
- • Buy-to-let investors typically target 6%+ net yield
- • Yield compresses (gets worse) when prices outpace rents
functions Formula
science Example: $300k property, $2,500/month rent, $8k annual expenses
Annual rent $30k = 10% gross yield on $300k property — looks great. After $1,500 vacancy and $8,000 expenses, net income is $20,500 = 6.83% net yield. Still good, but not as exciting as gross yield. Net yield is what matters for actual cash flow.
Expected Results
How to Use This Calculator
Enter property price + monthly rent
Basics for gross yield calculation.
Set vacancy rate
5-10% typical for most markets.
Add annual expenses
All operating costs (not mortgage).
Optional: add mortgage
For leveraged cash yield.
Compare gross vs net
Net yield is the meaningful number.
The Formula
Gross yield is misleading because it ignores costs. Net yield is the meaningful number — it shows what's actually left after paying taxes, insurance, maintenance, and management. Cash yield additionally subtracts mortgage payments, showing your levered cash return.
Gross Yield = Annual Rent / Property Price × 100 | Net Yield = (Annual Rent − Vacancy − Expenses) / Property Price × 100
lightbulb Variables Explained
- Gross Yield Rental income as % of property price (no expenses)
- Net Yield Income after expenses as % of price (true profitability)
- Cash Yield Net yield after mortgage payments
- Vacancy Loss Annual rent × vacancy rate
tips_and_updates Pro Tips
Always look at net yield, not gross — gross misleads
8%+ net yield is excellent; 6-8% good; 4-6% fair; under 4% poor
Operating expenses run 25-50% of gross rent depending on property
Net yield > mortgage rate = positive cash flow with leverage
High net yield often comes with higher risk markets
Buy-to-let investors typically target 6%+ net yield
Yield compresses (gets worse) when prices outpace rents
Frequently Asked Questions
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Data sourced from trusted institutions
All formulas verified against official standards.