Rental Yield Calculator
Rent as a percentage of everything you paid — gross yield, and net yield after operating expenses. The quick first screen for a rental, with its limits stated.
The first screen, with its limits printed on it
Yield — annual rent as a percentage of what the property costs you in total — is the fastest comparison in rental investing: one number that ranks a street of listings before lunch. Gross yield flatters; net yield, after operating expenses, begins the honesty. Neither counts the mortgage or the voids between tenants unless you put them in the expenses.
Gross yield = annual rent ÷ (price + buying costs) · Net yield = (annual rent − expenses) ÷ (price + buying costs)
Example: price $200,000 plus $6,000 of buying costs; rent $1,400 a month ($16,800 a year): gross yield 8.2%. After $4,500 of expenses, net yield 6.0% — two numbers describing the same door, two full points apart.
Yield is not return
Yield ignores financing, appreciation, equity build and tax — the components the fuller calculators on this site exist to weigh. Its job is triage: properties whose net yield cannot clear your mortgage rate need an appreciation story to justify themselves, and that story should be required out loud.
How this is calculated
Denominator is price + buying costs, as yield is conventionally struck against total acquisition cost in yield-quoting markets (the UK and Australia especially). Expenses for the net figure are annual operating costs — use the rental property calculator's full expense build if you need the number assembled properly.
Frequently asked questions
What is a good rental yield?
Entirely local: sub-4% gross in prime global cities, 8–12% in cash-flow markets. The meaningful test is spread over your borrowing cost and over the risk-free rate — yield is compensation for illiquidity and effort.
Gross or net — which do listings quote?
Gross, invariably, when selling. Recompute net with real expenses (management even if self-managing, maintenance, voids) before the figure enters any decision.
Why include buying costs in the denominator?
Because the cash actually committed includes them, and two otherwise equal properties with different transaction taxes are not equal investments. Yield on price alone overstates the expensive-to-buy one.
How does yield relate to cap rate?
Near-identical twins: cap rate uses NOI (rent minus expenses, carefully defined) over value. Net yield as computed here is the same spirit with a looser expense definition — the cap-rate page is the stricter sibling.
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