Rental Yield Calculator

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 makes it simple to figure out your property's return in just seconds. Enter details like the property price and the rent you collect, and the calculator does the math for you. Whether you are buying your first investment property or comparing several options, 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 Value: Type in the current market value of your property or the price you paid for it. This is the total amount your property is worth in dollars. If you're still deciding what you can afford, our Home Affordability Calculator can help you set a budget.

Annual Rental Income: Enter the total rent you collect from the property in one year. If you know your monthly rent, just multiply it by 12 to get the yearly amount.

Annual Expenses (optional): Add up any yearly costs tied to the property, such as maintenance, insurance, property taxes, and management fees. If you include expenses, the calculator will show your net rental yield. If you leave this blank, you will get your gross rental yield.

Once you fill in these fields and hit calculate, the tool will show your rental yield as a percentage. 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 Calculator, 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. To understand how long it takes to recover your investment, you can also use a Payback Period Calculator.

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. If you're weighing whether to rent or buy a property for yourself, our Rent vs Buy Calculator can help with that decision.

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. Tools like the ROI Calculator can help you evaluate overall returns, while the Closing Cost Calculator and Down Payment Calculator can help you plan for the upfront costs of purchasing an investment property. If you're financing the purchase, an Amortization Calculator can show you how your mortgage payments break down over time.

Frequently Asked Questions

What is gross rental yield?

Gross rental yield is the total yearly rent you collect divided by the property price, then multiplied by 100. It gives you a quick percentage that shows how much income the property earns before any expenses are taken out. It is the simplest way to compare rental properties.

What is the difference between net rental yield and cap rate?

Net rental yield divides your annual cashflow (rent minus vacancy loss minus all expenses) by the property price. Cap rate divides net operating income (effective rent minus expenses, but not mortgage payments) by the property price. They are similar, but cap rate focuses on the property's operating performance, while net yield reflects your personal return after all costs.

What vacancy rate should I use?

Most investors use a vacancy rate between 3% and 10%. A 5% vacancy rate is a common starting point. If your area has high demand for rentals, you can use a lower number. If the market is slow or turnover is frequent, use a higher number. Check local rental data to pick the most realistic rate.

Does this calculator include mortgage payments?

No. This calculator measures the property's income performance on its own. It does not subtract mortgage payments. If you finance the purchase, your actual take-home cashflow will be lower. You can use a separate mortgage or amortization calculator to figure out your monthly loan payments and subtract them yourself.

What expenses should I include?

Include any recurring yearly costs tied to the property. Common ones are property insurance, property taxes, maintenance and repairs, property management fees, and HOA or strata fees. You can also add utilities you pay, lawn care, pest control, or any other regular cost under "Other Expenses."

How is the payback period calculated?

The payback period is the property price divided by your annual cashflow. It tells you how many years it would take for the rental income (after expenses and vacancy) to pay back the full purchase price. If your cashflow is zero or negative, the payback period is shown as infinite or not applicable.

Can I enter rent as weekly or annually instead of monthly?

Yes. Next to the rent amount field, there is a dropdown menu where you can choose Weekly, Monthly, or Annually. The calculator will multiply your rent by the correct number to get the total annual rental income.

What if my rental yield is negative?

A negative rental yield means your expenses and vacancy losses are higher than the rent you collect. The property is costing you money each year. You may need to raise the rent, reduce expenses, or reconsider the investment. Some investors accept negative yield if they expect the property value to grow significantly over time.

Should I use the purchase price or current market value?

It depends on what you want to measure. Use the purchase price to see the return on what you actually paid. Use the current market value to see what return the property generates based on what it is worth today. Most investors use market value when deciding whether to keep or sell a property.

How do property management fees affect my yield?

Property management fees are usually 8% to 12% of the monthly rent. They lower your net rental yield because they are subtracted from your income. If you manage the property yourself, you can set this to $0 and your yield will be higher. Just remember that self-management takes your time and effort.

What is effective rental income?

Effective rental income is your total annual rent adjusted for vacancy. If you collect $24,000 a year in rent and have a 5% vacancy rate, your effective rental income is $22,800. It shows a more realistic picture of how much rent money actually comes in.

Can I compare two properties with this calculator?

Yes. Run the calculator once for each property and write down the results. Compare the gross yield, net yield, cap rate, and annual cashflow side by side. The property with the higher net yield and stronger cashflow is usually the better investment, but also consider location and future growth potential.