Real Estate
Rental Yield Calculator
Calculate the gross and net rental yield on a residential or commercial property in seconds. Compare deals on a level footing before you make an offer.
Gross rental yield
7.12%
Net rental yield
5.81%
Net yield on total cost
5.65%
Annual rent
$22,800
Annual net income
$18,600
This property returns a gross yield of 7.12% and a net yield of 5.81% once operating expenses are accounted for.
Projected rent vs. net operating income over time
The gap between the two lines is what expenses take out of rent each year — it widens or narrows depending on whether your expense growth or rent growth assumption is higher.
Your numbers
Property tax, insurance, maintenance, management — exclude the mortgage.
Used for net yield on total cost, below.
+Advanced options
Reduces net yield only — gross yield ignores vacancy by definition.
Adds a today's-purchasing-power figure to the projection below.
Long-term projection
| Year | Projected rent | Projected NOI | Projected property value | Yield on original cost |
|---|---|---|---|---|
| Year 1 | $22,800 | $18,600 | $320,000 | 5.81% |
| Year 5 | $22,800 | $18,600 | $320,000 | 5.81% |
| Year 10 | $22,800 | $18,600 | $320,000 | 5.81% |
| Year 20 | $22,800 | $18,600 | $320,000 | 5.81% |
Projected using your assumptions, held constant every year — real rent, expenses, and property values don't move in a straight line. Treat this as a planning sketch, not a forecast.
The formula
Gross Rental Yield = (Annual Rent ÷ Property Price) × 100
Net yield swaps annual rent for annual rent minus operating expenses, and net yield on total cost divides that same figure by price plus acquisition costs — giving three progressively more realistic views of the same deal.
An optional vacancy rate reduces the rent collected before expenses are subtracted (gross yield is left untouched — it's a screening figure by definition). The long-term projection applies your rent-growth, expense-growth, and appreciation assumptions as constant annual rates from year zero.
How to read it
Rental yield is the simplest way to compare investment properties that differ wildly in price and location. It strips a deal down to one number: how much annual income the property throws off, relative to what it costs.
Gross yield is the fastest screening tool — useful for comparing listings quickly, but it says nothing about running costs. A property with a high gross yield in a high-tax, high-maintenance area can easily underperform a lower-yielding property elsewhere once expenses are deducted.
Net yield corrects for that by subtracting operating expenses — property tax, insurance, maintenance reserves, management fees, and an allowance for vacancy — before dividing by the purchase price. This is the number worth comparing across serious shortlisted deals.
Net yield on total cost goes one step further, dividing net income by everything you actually spent to acquire the property, including closing costs, legal fees, and any immediate renovation. It’s the most honest yield figure of the three.
Frequently asked
What is a good rental yield?+
It depends on the market, but many investors treat a gross yield of 5–8% as solid for residential property, with anything above 10% often signalling higher risk (lower-priced areas, higher vacancy, or heavier maintenance). Net yield, after expenses, is usually 2–4 points lower than gross.
What’s the difference between gross and net rental yield?+
Gross yield divides annual rent by the property price and ignores costs. Net yield subtracts operating expenses — property tax, insurance, maintenance, management, and vacancy — before dividing by price, giving a more realistic picture of the return.
Should I include the mortgage in rental yield?+
No. Rental yield is a return on the property’s value, independent of how you finance it. Mortgage payments belong in cash flow and cash-on-cash return calculations instead — see the cash-on-cash return calculator for that view.
Does rental yield account for property appreciation?+
The headline yield figures don't — yield measures income return only. If you open advanced options and set an annual appreciation rate (plus rent and expense growth), the long-term projection table below will project property value, NOI, and yield on your original cost forward using those assumptions.
What does the long-term projection assume?+
It applies whatever rent growth, expense growth, and appreciation rates you enter as constant annual rates, holding vacancy fixed — a simplification, since real rents, costs, and values move unevenly. Treat the table as a planning sketch of your assumptions, not a forecast. Turning on an inflation rate adds one more figure showing that projected property value in today's purchasing power.
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Educational tool, not advice. This calculator illustrates a standard formula using the numbers you enter. It does not account for your full financial picture, taxes, or local market conditions, and it is not a recommendation to buy, sell, or hold any asset. Speak with a licensed professional before making investment decisions.