Rental Yield Calculator
Quickly evaluate any rental property's gross and net yield. Enter the price, monthly rent, and expenses to see your annual return, plus whether the deal passes the 1% rule.
Gross vs Net Income
Rental Yield, Explained
Rental yield is the income return on a property, expressed as a percentage. It answers a simple question: for every dollar a property is worth, how much rent does it generate in a year? A higher yield means more rental income relative to what the property costs; a lower yield means the property leans more on price appreciation than on cash rent for its returns. Yield is one lens on a property — it does not, on its own, tell you whether a purchase is a good decision.
Use the calculator above to estimate a property's gross and net rental yield from figures you enter. The sections below explain what those numbers mean and how to read them honestly, and how yield fits alongside other tools when you screen investment properties.
How This Calculator Works
The calculator uses two standard formulas. Both are widely published and consistent across real estate references.
Gross rental yield = annual rent ÷ property value × 100
Gross yield uses rental income only, before any costs. It is quick to calculate and useful for comparing properties on a like-for-like basis, but it overstates what you actually keep because it ignores expenses.
Net rental yield = (annual rent − operating expenses) ÷ property value × 100
Net yield subtracts the ongoing costs of owning and running the property. It is a more realistic picture of the cash return, because it reflects money that leaves your pocket, not just money that comes in.
Worked Example (Illustrative Only)
The figures below are made up to show the math — they are not benchmarks, targets, or market data.
- Property value: $300,000
- Monthly rent: $1,800 → annual rent = $21,600
- Annual operating expenses: $6,000 (taxes, insurance, maintenance, management)
Gross yield = $21,600 ÷ $300,000 × 100 = 7.2%
Net yield = ($21,600 − $6,000) ÷ $300,000 × 100 = $15,600 ÷ $300,000 × 100 = 5.2%
Same property, same rent — but once expenses are subtracted, the honest return is nearly two percentage points lower. That gap is the whole reason net yield exists.
Gross vs Net Yield
Gross yield is the headline number; net yield is the truth-in-advertising number.
Gross yield is fine as a first-pass filter — it lets you rank several properties quickly using only rent and price, both of which are easy to find. The problem is that it silently assumes the property is free to own, which no property is. Two homes with identical gross yields can deliver very different net yields if one carries higher taxes, older systems, or a homeowners-association fee.
Net yield is more honest because it reflects what you actually keep. To calculate it, subtract the recurring costs of ownership from annual rent. Expenses to consider typically include:
- Property taxes
- Insurance
- Maintenance and repairs
- Property management fees
- HOA or strata fees
- Vacancy allowance (rent lost between tenants)
- Ongoing utilities you pay as the owner
Note what net yield does not subtract: mortgage principal and interest. Yield measures the property's own income return, independent of how you finance it. To layer in a mortgage and see your return after debt service, use the cash-on-cash calculator — and see the FAQ below.
What's a Reasonable Yield?
There is no single "good" yield, and anyone quoting one number for everywhere is oversimplifying. Reasonable yields vary widely by market, property type, and the moment in the cycle.
Broadly, markets fall along a spectrum:
- High-yield markets tend to have lower purchase prices relative to rents. Cash yield looks strong, but price growth is often slower and expenses (taxes, insurance, maintenance) can eat into the return.
- Appreciation markets tend to have high prices relative to rents, so cash yields look thin — investors there are betting more on the property's value rising over time than on monthly rent.
Neither is automatically "better." A strong-cash-flow property in one metro and a low-yield, high-growth property in an expensive market like California can both be sensible for different investors with different goals and time horizons. Rather than chase a target number, compare a property's yield against local comparable properties and against your own costs and objectives. We deliberately do not state a target yield here, because a figure that is excellent in one market would be a warning sign in another.
Frequently Asked Questions
What's the difference between gross and net rental yield?
Gross yield uses annual rent ÷ property value and ignores costs. Net yield subtracts operating expenses first, so it reflects what you actually keep. Gross is better for quick comparison; net is better for deciding.
Is rental yield the same as cap rate?
They are closely related. A capitalization rate is typically calculated as net operating income ÷ property value, which is essentially net rental yield. The terms are often used interchangeably, though "cap rate" is more common in commercial real estate. Definitions can vary by source, so check how any given tool or advisor defines it.
What is a good rental yield?
It depends entirely on the market. High-yield markets and appreciation-focused markets produce very different numbers, and both can be reasonable. Compare against local comparable properties rather than a universal target — this page intentionally does not promise a specific "good" number.
Does rental yield include my mortgage or financing costs?
No. Standard rental yield measures the property's income return independent of financing, so mortgage principal and interest are excluded. To understand your personal cash-on-cash return after a loan, you would use a separate calculation that factors in your down payment and debt service.
Which yield should I rely on?
Use gross yield to screen and compare properties quickly, and net yield to make an actual decision — because net yield reflects real ownership costs. Always confirm your expense assumptions against real quotes for taxes, insurance, and management in that specific location.
How accurate is this estimate?
It is only as accurate as your inputs. The formulas are standard, but rent, price, and especially expenses vary by property and market. Treat the output as an educational estimate, not a guarantee — and verify local figures before acting.