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Rental Yield Calculator

Evaluate a rental property's performance. Calculate gross and net rental yield based on purchase price, annual rental income, and operating expenses.

Include: property tax, insurance, maintenance, HOA fees, etc.

Results

Enter values and click Calculate to see results

Understanding Rental Yield

Rental yield measures the annual return on a property investment from rent alone. It helps compare properties and evaluate whether a purchase makes financial sense.

Gross Yield = (Annual Rent / Purchase Price) × 100%
Net Yield = ((Annual Rent - Expenses) / Purchase Price) × 100%

Gross yield gives a quick comparison. Net yield is more accurate since it accounts for property taxes, insurance, maintenance, and other costs.

Rental Yield Benchmarks

Yield RangeAssessmentTypical Market
> 8%ExcellentSecondary cities, emerging areas
6-8%GoodGrowing suburbs
4-6%AverageEstablished urban areas
3-4%LowPrime city centers
< 3%Very LowLuxury markets, high-appreciation areas

Higher yields often come with higher risk or lower appreciation potential.

Common Rental Expenses

Property Tax

Typically 1-2% of property value annually

Insurance

Landlord insurance: $500-2000/year depending on property

Maintenance

Budget 1% of property value per year for repairs

Property Management

8-12% of monthly rent if using a management company

Vacancy Allowance

Plan for 5-10% vacancy (1-2 months per year)

Frequently Asked Questions

What is a good rental yield?
A good gross rental yield is 6% or higher. Net yields of 4-5% are solid after expenses. Prime locations often have lower yields (3-4%) but better appreciation.
Should I focus on yield or appreciation?
It depends on your strategy. High yield provides cash flow now. High appreciation builds wealth long-term. Many investors seek a balance — decent yield with moderate appreciation potential.
How do I calculate net yield accurately?
Include all annual expenses: property tax, insurance, maintenance, management fees, HOA fees, and vacancy allowance. Subtract from annual rent, then divide by purchase price.
Does rental yield include mortgage payments?
No. Rental yield is based on the property price, not your financing. Mortgage payments affect cash flow but not yield. This allows comparing properties regardless of how they are financed.
What affects rental yield?
Location, property type, local rental demand, purchase price, and operating costs all affect yield. Properties in high-demand rental areas with reasonable prices typically offer better yields.

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