Rental Yield Calculator
Calculate gross and net rental yield on an investment property.
Maintenance, insurance, management fees, property tax
Results update as you type.
This calculator is for illustrative purposes only. Actual rates, fees and terms vary by lender. Consult a qualified financial adviser before making borrowing decisions.
How it works
Rental yield measures the annual income return on an investment property as a percentage of its purchase price. A rental yield calculator is the foundation of any buy-to-let or real estate investment analysis, letting investors compare a property against other asset classes like bonds or index funds on an apples-to-apples basis. Gross yield is the simpler headline figure: annual rent divided by property value. Net yield is more meaningful because it accounts for the inevitable costs of ownership — maintenance and repairs (typically 1% of property value annually), landlord insurance, property management fees (8–12% of rent if professionally managed), property taxes, and periods of vacancy when no rent is collected. A property with a high gross yield but heavy expenses can deliver a net yield that barely justifies the illiquidity and management burden of direct property ownership. When comparing markets, yields in expensive cities (London, San Francisco, Sydney) tend to be lower (2–4%) because prices have appreciated faster than rents, while secondary cities and rural markets may show 7–10% gross yields but also carry higher vacancy risk. In a rental yield calculator, net yield above 5–6% is generally considered attractive in most developed markets, though the right target depends on your financing cost, local capital gains expectations, and alternative investment options available to you.
Gross Yield = (Annual Rent / Property Value) × 100; Net Yield = ((Annual Rent − Expenses) / Property Value) × 100
Annual rent is monthly rent multiplied by 12, then reduced by the vacancy rate (e.g., 5% vacancy means 95% occupancy, so effective annual rent = monthly × 12 × 0.95). Gross yield divides that by property value. Net yield subtracts all annual expenses (maintenance, insurance, management fees, property tax) before dividing by property value. Net yield is the more accurate profitability measure.
Source:Standard real estate investment analysis
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter property value and monthly rent.
- 2
Adjust the options
Adjust annual expenses and vacancy rate if they apply — sensible defaults are already set.
- 3
Read your result
Gross yield updates instantly as you type — no button to press.
Frequently asked questions
What is a good rental yield?
A good rental yield depends on location, property type, and your financing cost. As a general benchmark, a net yield above 5–6% is considered solid in most markets. In expensive gateway cities like New York or London, net yields of 2–4% are common because property values have outpaced rent growth; investors accept lower yields expecting capital appreciation. In regional cities or emerging markets, yields of 7–10% gross are achievable but may carry higher vacancy risk and lower liquidity. Your yield must exceed your mortgage interest rate to achieve positive cash flow.
What expenses should I include in net yield?
For an accurate net yield calculation, include: property taxes (often 1–2% of value annually), landlord or property insurance, maintenance and repairs (budget 1% of property value per year as a long-run average), property management fees (8–12% of gross rent if using a manager), letting/leasing agent fees, periodic major costs like appliance replacement and redecorating between tenancies, and any homeowner association fees. Many amateur investors underestimate maintenance and management costs, which causes real returns to disappoint the headline gross yield.
How does vacancy rate affect my return?
Even a 5% vacancy rate — equivalent to about 18 days empty per year or one tenant turnover every two years — reduces effective annual rent by 5%. A 10% vacancy rate (about five weeks empty) cuts rent by a tenth. In markets with low tenant demand or higher turnover (student rentals, short-term leases, vacation markets), vacancies can average 15–20% annually, substantially eroding returns. Factor in not just physical vacancy but also rent collection risk — late payments and eviction proceedings can cause months of lost income.
Should I compare yield or total return?
Yield captures income return only. Total return adds capital appreciation, which can dwarf the income return in strong property markets. However, capital appreciation is uncertain and unrealized until you sell. Income yield is the 'bird in hand' — the cash flow that pays your mortgage, covers expenses, and provides spendable income. Most professional property investors target properties that are cash-flow positive (net yield exceeds financing cost) and treat appreciation as a bonus rather than a primary thesis, which provides a margin of safety if values stagnate or fall.
How does rental yield compare to other investments?
Rental yield should be compared against other asset returns on a risk-adjusted, after-tax basis. A 5% net yield on property faces mortgage interest (if leveraged), property taxes, vacancy risk, management burden, and illiquidity. A dividend-paying index fund yielding 4% is liquid, diversified, low-maintenance, and tax-efficient. Direct property also carries leverage amplification — positive when values rise, dangerous when they fall. The comparison shifts favorably for property when you count appreciation, tax deductions (mortgage interest, depreciation), and the ability to add value through improvements.