Rental Yield Calculator – Calculate Rental Property Yield

Thinking about buying a rental? Before you fall for the listing photos, run the numbers. This Rental Yield Calculator tells you whether the property actually pays. Drop in the price, the rent you’d charge, and what it costs to keep the place running. You’ll get the gross yield, the net yield after operating expenses, and — if you add an optional mortgage payment — the annual cash flow the property produces after debt service.

The purchase price, or the current market value if you already own it.

What the property rents for each month at full occupancy.

The share of the year you expect the property to sit empty. 5% works out to roughly two and a half weeks a year.

Property tax, insurance, maintenance, management fees, HOA dues, and similar costs. Don’t include the mortgage here.

Leave at 0 to see yield without leverage. If you enter a figure, use the total annual loan payment only — don’t include property tax or insurance here if they’re already in operating expenses above.

Gross Rental Yield
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Net Rental Yield
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Gross Annual Rent
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Net Operating Income
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Property Yield Summary
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Set your inputs to calculate
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Before you lean on these numbers, a quick heads-up. The calculator runs basic yield math on whatever you feed it. It doesn’t touch mortgage amortisation, capital gains tax, income tax on rental profit, depreciation, or one-off capital expenses like a new roof or furnace. Think of it as a first-pass filter, not a full financial model.

💱 Enter amounts in whatever currency you work in. Everything here is ratios and percentages, so the currency itself doesn’t change the math.

What Is Rental Yield?

Rental yield is what a property pays you back each year, measured as a percentage of what it cost or what it’s worth today. Rent for 24,000 a year on a 300,000 property? That’s an 8% yield. One number, and you know how hard your money is working.

It’s the same idea as dividend yield on a stock or the rate on a fixed deposit. You put capital in, and the yield is what comes back each year. The only difference with property is that the income is rent, and the capital is the purchase price.

People use rental yield in two main ways. Investors screen deals with it — a quick gut check on whether a listing deserves a closer look. Landlords use it as an ongoing yardstick. A property that started at 6% and slid to 3% over five years usually means the value has run ahead of the rent — not always a problem, but worth knowing.

Here’s the awkward part. There’s no single “correct” yield. Two people looking at the same property can end up with different numbers depending on whether they count the mortgage, how they guess vacancy, and which expenses they include.

How to Calculate Rental Yield

Honestly, the math is simple once you know what goes in. Two numbers drive the basic version — annual rent and property value.

Start by adding up everything the property brings in over a year. Rents for 1,500 a month? That’s 18,000 a year at full occupancy. Multiple units? Add them all up. That’s your gross annual rent — the theoretical max if the place never sits empty.

Then pick your denominator. The price you paid, or today’s market value. Both work, but they answer different questions. Purchase price tells you what your original capital is earning. Today’s value tells you how the property stacks up against deals you could buy right now.

Divide one by the other, multiply by 100. That’s your gross yield.

For a real-world picture, two more things come into play. Vacancy is the chunk of the year you expect the place to be empty between tenants. Expenses are everything it costs to keep the property running — property tax, insurance, maintenance, management fees, HOA dues, and the occasional repair.

Knock vacancy off the rent, subtract expenses from what’s left, divide by the property value. That’s your net yield.

Most seasoned investors care about the net figure, because rental expenses are sneakier than they look. A property that reads like a 6% yield on the gross line can quietly slip to 3.5% or 4% once you count the real costs.

Gross Rental Yield vs Net Rental Yield

People quote these two interchangeably, but they tell very different stories.

Gross rental yield ignores costs entirely. Annual rent divided by property value, full stop. That makes it handy for one thing — comparing properties across different markets. Trying to choose between a condo in one city and a duplex in another? Gross yield gives you a clean, uncluttered starting point.

Net rental yield is what you actually keep. Vacancy, taxes, insurance, maintenance, management fees — all of it comes out before the money reaches your bank account. Two properties can show the same gross yield and end up with wildly different net yields because one has brutal property taxes and the other doesn’t.

Quick example. Property A rents for 24,000 a year, costs 300,000, and runs 9,000 a year in expenses. Net operating income is 15,000. That’s a 5% net yield. Property B has the same rent and price, but only costs 4,000 a year to run. Net operating income is 20,000. Net yield: 6.67%. Same gross line, very different reality.

How to Use This Rental Yield Calculator

Five inputs, and each one moves the needle.

Property Price / Value. Purchase price if you’re evaluating a deal. Current market value if you already own the place. Whatever you pick, stick with it across every property you compare, or the numbers won’t line up.

Monthly Rent. What you’d charge at full occupancy. Multiple units? Use the combined monthly total. Don’t subtract vacancy here — the calculator handles that separately so you can see how much it bites.

Vacancy Rate. The share of the year the property sits empty. Vacancy assumptions vary a lot by market and property type — a stable long-term single-family rental behaves very differently from a student unit or a short-term rental. Use local rental-market data where you can, and consider testing a few vacancy scenarios in the calculator to see how sensitive the net yield is to that one number.

Annual Operating Expenses. Every recurring cost except the mortgage. Property tax, insurance, maintenance, management fees, landscaping, snow removal, HOA dues, pest control, and a small reserve for occasional repairs. A common shortcut is to budget 1% of the property value per year for maintenance alone, then add the rest on top.

Annual Mortgage Payments (Optional). If you’re financing the purchase, put the total annual loan payment here — principal and interest only. Don’t duplicate property tax or insurance if they’re already in operating expenses above. The yield numbers don’t change because mortgages aren’t part of yield, but you’ll see a separate cash-flow figure so you know whether the property covers its own debt.

Hit calculate, and you get four headline numbers: gross yield, net yield, gross annual rent, and net operating income. The table underneath fills in the details — monthly net income, effective rent after vacancy, expense ratio, and cash flow after the mortgage if you entered one.

Rental Yield Formula

If you’d rather do this by hand, both formulas are short.

Gross rental yield:

Gross Yield = (Annual Rent ÷ Property Value) × 100

Net rental yield:

Net Yield = ((Annual Rent × (1 − Vacancy Rate)) − Annual Expenses) ÷ Property Value × 100

Both output a percentage. Gross yield is always higher than net yield, sometimes shockingly so. The gap between the two tells you exactly how much of the rent is getting eaten by running costs — one of the most useful things to know about a property before you sign anything.

One caveat. The calculator uses simple annual figures. In real life, rent creeps up, expenses move at their own pace, and property values swing around. A Rental Yield Calculator gives you a snapshot based on today’s numbers. It doesn’t project how the yield will drift over five or ten years.

There’s also a similar metric called cash-on-cash return. Same idea, but it swaps property value for the actual cash you put in — usually the down payment plus closing costs. Two identical net yields can produce wildly different cash-on-cash returns depending on financing. That’s outside what a Rental Yield Calculator does, but it’s worth knowing once you start comparing leveraged deals.

What Counts as a Good Rental Yield?

There’s no universal number that qualifies as a good yield. What works depends on the location, the property type, the market cycle, and what the investor is trying to achieve. A yield that looks thin in one city might be excellent in another, and the same number can mean completely different things for an income-focused investor versus someone betting on appreciation.

That’s why comparing rental yield to a fixed benchmark is less useful than comparing properties against each other. The better question isn’t “is this a good yield?” but “is this yield better than my alternatives, given the risks?”

Here’s a practical way to layer the analysis:

  • Gross yield gives you a fast screen across multiple listings.
  • Net yield shows what’s left after vacancy and operating costs. This is the number most experienced investors focus on.
  • Cash flow after mortgage tells you whether the property actually pays its own way once financing is in the picture.
  • Cash-on-cash return replaces property value with the cash you actually invested — typically down payment plus closing costs. Two identical net yields can produce very different cash-on-cash returns depending on financing.
  • Total return adds appreciation and principal paydown on top of income. Some properties with low yields deliver strong total returns; others with high yields don’t appreciate much.

Some general context is still useful. Property yields vary widely by country, city, and property type, and there’s no single source that covers every region. In broad terms, lower yields tend to cluster in cities where property values are high relative to rent, while higher yields tend to appear where values are lower relative to rent — often with more volatility or slower appreciation. But local conditions, property type, and the specifics of the deal matter far more than any headline range.

Comparing net yield with the borrowing rate can provide a useful starting point, but it doesn’t by itself determine whether a financed property is viable. Financing structure, principal repayment, taxes, appreciation, transaction costs, and cash-on-cash return can all change the result materially. Treat it as one input in the decision, not the decision itself.

Things to Keep in Mind About Rental Yield

Yield is a starting point, not a verdict. A few realities worth keeping in the back of your head.

Yield ignores capital growth. A 3% net yield in a market growing 6% a year might beat a 6% yield in a flat market. Yield is income only. Total return also includes appreciation and any principal paydown from the mortgage.

Expense estimates are usually too low. New landlords routinely undershoot maintenance, vacancy, and management costs. Running a rental is a business, and businesses have recurring costs that are easy to forget until they land on your credit card. Pencil in a little extra as a cushion.

Vacancy isn’t evenly distributed. A property that sits empty two months in year one and never again isn’t the same as one that averages 5% vacancy every year. Location, tenant type, and local supply all move the real number around.

Financing changes everything. Yield doesn’t include the mortgage because debt costs depend on how you finance, not on the property. But your actual return on invested capital is heavily shaped by the loan. Two investors buying the same property can end up with very different cash-on-cash returns depending on down payment and rate.

Property value isn’t static. Today’s value gives you today’s yield. If the property appreciates 20% over three years while rent stays flat, the yield drops accordingly. That’s normal in a rising market.

Tax treatment varies. Rental income is taxed almost everywhere, and the rules differ widely. Some places allow deductions for mortgage interest, depreciation, or repairs. Others don’t. The calculator shows pre-tax figures. After-tax reality depends on your location and situation.

If this Rental Yield Calculator was useful, these related tools might round out your financial planning.

Additional Financial Resources

If you’re weighing rental property against other real estate routes, the SEC’s Investor.gov page on real estate investment trusts is a solid primer on how REITs work as an alternative to buying property directly.

For the tax side of running a rental — what counts as income, what’s deductible, and how depreciation works — the IRS Publication 527 on Residential Rental Property is the go-to reference for US landlords.

Frequently Asked Questions

It’s a tool that takes a property’s annual rent and value and turns the income into a percentage. Enter the price, the monthly rent, a vacancy estimate, and your operating expenses, and it spits out both the gross and net yields.
It depends heavily on the market, the property type, and what you’re trying to accomplish. Broadly speaking, lower yields tend to cluster in cities where property values are high relative to rent, while higher yields tend to appear where values are lower relative to rent. But local conditions matter far more than any headline range. The net yield — after vacancy and expenses — is the number that tells you what the property actually produces, and whether that’s “good” depends on your alternatives and your goals.
Use gross yield for a fast pass across lots of properties. Use net yield when you’re serious about a specific deal, because it shows what’s actually left after expenses and vacancy. Two properties with identical gross yields can end up with very different net yields.
Mortgage payments aren’t part of yield, because they depend on how you finance the purchase, not on the property itself. There’s an optional mortgage field that adds a cash-flow figure, but the yield percentages stay the same whether you finance or pay cash.
Property tax, landlord insurance, maintenance and repairs, management fees, HOA dues, landscaping, pest control, and a reserve for bigger one-offs like appliance replacements or exterior painting. A common shortcut is to budget 1% of the property value per year for maintenance, then add everything else on top.
Vacancy cuts straight into the rent you actually collect. A 5% vacancy rate shaves 5% off your effective annual rent — small on paper, but real over a year. Student housing and short-term rental markets can see much higher vacancy, which hits yield harder.
Purchase price tells you the yield on your original capital — useful if you already own the property. Current market value tells you how the property stacks up against deals available today. Whichever you pick, use the same one across every property you’re comparing.
Nope. Yield measures income only. Capital appreciation is a separate piece of total return. A 3% yield in a hot growth market might beat a 6% yield in a flat one. The calculator captures income — it doesn’t project price growth.

⚠️ Disclaimer: The results from this Rental Yield Calculator are hypothetical projections based on user-supplied assumptions and are for educational and informational purposes only. They should not be treated as financial, investment, tax, or legal advice. The calculator uses a simplified model and does not account for mortgage amortisation, income tax on rental profit, capital gains tax, depreciation, one-off capital expenditures, or changes in property value over time. Real estate investing involves risk, including the possibility of loss. Please consult a qualified financial advisor or tax professional before making investment decisions.