Rental Yield Calculator

The Rental Yield Calculator provides two key metrics that investors use to evaluate and compare rental properties: gross rental yield and net rental yield. Gross rental yield is the simpler of the two calculations. It divides your total annual rental income by the property value and expresses the result as a percentage. The formula is: Gross Yield = (Monthly Rent x 12) / Property Value x 100. For example, a property worth $300,000 that rents for $2,000 per month generates $24,000 in annual rent, resulting in a gross yield of 8%. Gross yield is useful for quick comparisons because it requires only two data points. You can rapidly screen properties by calculating gross yield from listing prices and market rents without needing detailed expense information. Net rental yield goes deeper by accounting for operating expenses. The formula is: Net Yield = (Annual Rent - Annual Operating Expenses) / Property Value x 100. Using the same example, if annual operating expenses are $6,000, the net annual income is $18,000 and the net yield is 6%. Operating expenses in this calculation typically include property taxes, insurance, maintenance and repairs, property management fees, vacancy allowance, and any utilities paid by the owner. Like cap rate, net rental yield does not include mortgage payments because it measures the property's inherent return regardless of financing. The gap between gross and net yield reveals your expense burden. A large gap suggests high operating costs relative to income. A narrow gap indicates efficient operations. Tracking both metrics helps you identify properties where expense optimization could significantly improve returns. Rental yield is particularly useful for comparing properties at different price points and in different markets, giving you an apples-to-apples return comparison.