🏘️ Rental Yield Calculator
A rental yield calculator computing gross and net rental yield from property value, monthly rent, and annual expenses, checked against the 5-8% benchmark range.
Within the typical 5-8% rule-of-thumb range
Annual rent used: $21,600
What Rental Yield Calculator Does
Rental yield is the simplest way to size up whether a property's rent justifies its price, expressed as a percentage so properties of any price point can be compared on equal footing. Gross yield is the headline number most listings quote; net yield — subtracting the actual costs of owning the property — is the more honest one, and the two can differ substantially once taxes, insurance, maintenance, and management fees are accounted for.
Neither version accounts for financing. A property can have a perfectly respectable rental yield and still produce negative monthly cash flow once a mortgage payment is subtracted — yield measures the property's own income efficiency, not what is left over for the owner after debt service.
How to Use Rental Yield Calculator
- Enter the property value and monthly rent
- Enter annual expenses (taxes, insurance, maintenance, management, HOA)
- Read the gross and net rental yield, and how it compares to the typical benchmark range
Formula Used by Rental Yield Calculator
Gross and net rental yield
Gross yield = (annual rent ÷ property value) × 100 · Net yield = ((annual rent − annual expenses) ÷ property value) × 100
Worked example
$300,000 property, $1,800/month rent, $4,500/year expenses
- Annual rent: $1,800 × 12 = $21,600
- Gross: 21,600 ÷ 300,000 × 100 = 7.2%
- Net: (21,600 − 4,500) ÷ 300,000 × 100 = 5.7%
Result: Gross yield 7.2%, net yield 5.7%
How to Read Your Result
The 5-8% benchmark is a rule of thumb, not a standard
It is widely repeated across property investment sites as a rough guide for a "good" gross yield, but the right number for a specific market depends heavily on local price-to-rent ratios, growth expectations, and how much of the return an investor expects to come from appreciation versus income.
Gross and net yield can rank properties differently
A property with a high rent relative to price but also high running costs (older buildings, HOA-heavy condos) can have a strong gross yield and a mediocre net yield — always compare on net yield when the properties have meaningfully different expense profiles.
Higher yield is not automatically a better investment
Yield and risk tend to move together in real estate: markets with the highest gross yields are often lower-growth or higher-vacancy-risk areas, while low-yield markets are frequently the ones with the strongest price appreciation history. Yield is one input into a real estate decision, not the whole answer.
Compare yield across similarly-financed scenarios
Because this calculator ignores financing, it is a fair way to compare two different properties' income efficiency independent of how each would actually be financed — useful for an apples-to-apples comparison before financing terms (which vary by lender, credit profile, and loan type) are factored in separately.
Limitations & Accuracy Notes
- Does not account for financing costs, vacancy periods, or capital expenditure reserves — for the financing-adjusted picture, pair this with a cash-on-cash return or DSCR calculation.
- Property value is typically the purchase price or a current market estimate — using a stale valuation will skew the yield in either direction as the market moves.
- The 5-8% reference band is a commonly cited rule of thumb across property investment sites, not a rate published by a regulator or standards body.
- Does not include vacancy periods in the rent figure — entering the full occupied-rate rent will overstate yield for a property with meaningful vacancy history; subtract an estimated vacancy loss from the annual rent first for a more realistic figure.