Rental Yield Calculator
Rent Income Alone Doesn't Tell You If a Property Is a Good Deal
A $2,000/month rental sounds identical whether the property cost $250,000 or $500,000, but the return on capital is twice as good in one case. Rental yield normalizes rent against purchase price so properties of any size become comparable on a single percentage figure — and this calculator offers both the quick headline number and the more honest version that subtracts operating costs.
The Formula
Gross yield, the number most listings advertise:
Net yield, which accounts for what actually reaches the owner:
Where This Calculation Matters
- Comparing listings — yield lets you rank properties of very different prices on the same scale, something raw rent or raw price alone can't do.
- Spotting overpriced rentals — a market where prices have risen faster than rents shows up immediately as compressed yields.
- Budgeting realistic expenses — property management fees, insurance, maintenance reserves, vacancy, and taxes routinely take 30-50% of gross rent, which is exactly why net yield tends to run well below the gross figure advertised.
- Setting a purchase ceiling — working backward from a target yield tells you the maximum price to offer for a property renting at a known rate.
Gross vs. Net Yield
The gap between gross and net widens as operating costs grow relative to rent — a property with high HOA fees or an older roof needing reserve funds can look attractive on gross yield and mediocre on net:
| Annual expenses | Gross yield | Net yield |
|---|---|---|
| $0 | 8.00% | 8.00% |
| $3,600 (15% of rent) | 8.00% | 6.80% |
| $7,200 (30% of rent) | 8.00% | 5.60% |
| $12,000 (50% of rent) | 8.00% | 4.00% |
How to Use This Calculator
- Choose "Gross Rental Yield" or "Net Rental Yield" from the mode selector.
- Enter the Property Price.
- Enter the Monthly Rent.
- For net yield, also enter Annual Expenses (taxes, insurance, maintenance).
- Select Calculate to see the yield percentage.
Related Calculations
Once you know the yield, see how the property's value might grow over time with the Property Appreciation Calculator, or weigh it against your own housing costs using the Affordability Calculator.