Rental Yield Calculator
Free Rental Yield Calculator. Free online tool with accurate results using verified formulas. Includes worked examples, FAQ, and instant calculations.
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy
Rental Yield Calculator Formula
Net Yield = (Annual Rent × (1 - Vacancy Rate) - Expenses) / Property Value × 100
Gross yield divides total annual rent by property value. Net yield subtracts vacancy losses and operating expenses first, giving a more realistic return figure. Both are expressed as percentages.
Rental Yield Calculator — Worked Examples
Example 1: Suburban Single-Family Rental
Problem:A $350,000 home rents for $2,200/month with $7,200 annual expenses and 5% vacancy rate. What is the yield?
Solution:Gross Annual Rent = $2,200 × 12 = $26,400\nVacancy Loss = $26,400 × 5% = $1,320\nEffective Rent = $26,400 - $1,320 = $25,080\nNet Income = $25,080 - $7,200 = $17,880\nGross Yield = $26,400 / $350,000 = 7.54%\nNet Yield = $17,880 / $350,000 = 5.11%
Result:Gross Yield: 7.54% | Net Yield: 5.11% | Monthly Cash Flow: $1,490
Example 2: Urban Condo Rental
Problem:A $500,000 condo rents for $2,800/month with $12,000 annual expenses (including HOA) and 3% vacancy rate.
Solution:Gross Annual Rent = $2,800 × 12 = $33,600\nVacancy Loss = $33,600 × 3% = $1,008\nEffective Rent = $33,600 - $1,008 = $32,592\nNet Income = $32,592 - $12,000 = $20,592\nGross Yield = $33,600 / $500,000 = 6.72%\nNet Yield = $20,592 / $500,000 = 4.12%
Result:Gross Yield: 6.72% | Net Yield: 4.12% | Monthly Cash Flow: $1,716
Rental Yield Calculator — Frequently Asked Questions
What is rental yield and why does it matter?
Rental yield is the annual return on a rental property expressed as a percentage of the property's value. It's one of the most important metrics for evaluating rental property investments. Gross rental yield uses total rent income before expenses, while net rental yield accounts for operating costs and vacancy. A higher yield means the property generates more income relative to its cost. Typical gross yields range from 4-12% depending on the market, with net yields typically 2-4% lower.
What is a good rental yield?
A good gross rental yield is typically 6-10%. Below 5% is considered low yield (common in expensive metro areas), 5-8% is moderate, and above 8% is high yield. However, high-yield properties often carry more risk — they may be in less desirable areas, require more maintenance, or have higher tenant turnover. Net yield above 5% is generally considered strong. The '1% rule' suggests monthly rent should be at least 1% of the purchase price (equivalent to 12% gross yield), though this is difficult to achieve in many markets.
What is vacancy rate and how does it affect yield?
Vacancy rate is the percentage of time a rental property sits empty between tenants. A 5% vacancy rate means the property is vacant about 18 days per year on average. Vacancy directly reduces your effective income. National average vacancy rates are around 6-7%, but vary widely by location: urban areas with strong demand may see 2-4%, while rural or oversupplied markets may see 10-15%. Always factor vacancy into your calculations — assuming zero vacancy leads to overly optimistic projections.
What expenses should I include in rental yield calculations?
Include all recurring operating expenses: property taxes, property insurance, maintenance and repairs (budget 1-2% of property value per year), property management fees (8-12% of rent if using a manager), landlord-paid utilities, HOA fees, pest control, lawn care, and legal/accounting costs. For a more accurate picture, also consider a capital expenditure reserve (5-10% of rent) for major items like roof, HVAC, and appliances. Don't include mortgage payments in expense calculations for yield — those are financing costs, not operating expenses.