Introduction
Rental yield tells you how much money a rental property earns compared to what it costs. It is one of the most important numbers for any real estate investor. Our Rental Yield Calculator shows your property's return. Enter details like the property price and the rent you collect, and the calculator works out the result. Knowing the rental yield helps you make smarter choices with your money.
How to use our Rental Yield Calculator
Enter your property details below to find out your rental yield, the percentage return you earn on your property investment each year.
Property Price: Type the price you paid for the property, or its current market value, in dollars.
Rent Amount: Type the rent you collect and pick how often you collect it: weekly, monthly, or yearly. The calculator turns it into a yearly amount.
Annual Expenses: Enter the yearly costs that apply: property insurance, property taxes, maintenance and repairs, property management fees, HOA or strata fees, and any other costs. Leave the rest at $0.
Expected Vacancy Rate: Enter the share of the year you expect the property to sit empty. Net yield counts this lost rent; gross yield does not.
Once you fill in these fields and hit calculate, the tool will show your gross and net rental yield as percentages, along with your effective rental income, payback period, and cap rate. A higher percentage means your property earns more income compared to what it is worth. This number helps you compare different properties and decide if an investment is a good deal.
What Is Rental Yield?
Rental yield is a simple way to measure how much money a rental property earns compared to how much it costs. It is shown as a percentage. Think of it like this: if you buy a property and rent it out, rental yield tells you how good of an investment that property is.
How Rental Yield Works
There are two main types of rental yield: gross rental yield and net rental yield.
Gross rental yield is the simplest version. You take the total rent you collect in one year and divide it by the property's purchase price. Then you multiply by 100 to get a percentage. This gives you a quick snapshot, but it doesn't account for expenses.
Net rental yield is more accurate. It takes your yearly rental income and subtracts all the costs of owning the property, things like property taxes, insurance, maintenance, and management fees. Then you divide that number by the property's purchase price and multiply by 100. This tells you what you're actually earning. This is closely related to the cap rate, which measures net operating income against property value and is another essential metric for real estate investors.
What Is a Good Rental Yield?
A gross rental yield between 5% and 8% is generally considered good. Anything above 8% is great, but it may come with higher risk. A yield below 4% might mean the property won't generate strong cash flow, though it could still grow in value over time.
Why Rental Yield Matters
Rental yield helps investors compare different properties quickly. A cheaper property in one neighborhood might earn a higher yield than an expensive property in another. Without calculating yield, it's hard to know which investment puts more money in your pocket.
Keep in mind that rental yield is just one piece of the puzzle. You should also consider property appreciation (how much the property's value grows over time), vacancy rates (how often the property sits empty), and location quality before making an investment decision.