Rental Yield Calculator
Calculate both Gross Rental Yield and Net Rental Yield percentages, plus annual gross and net rental income, from any property purchase price and monthly rent.
Property Value, Rent & Operating Expenses
Gross & Net Rental Yield Formulas
Gross Yield (%) = (Annual Rent รท Purchase Price) ร 100 | Net Yield (%) = [(Annual Rent โ Annual Operating Expenses) รท Purchase Price] ร 100- Annual Gross Rental Income = Monthly Rental Income ร 12.
- Annual Net Rental Income = Annual Gross Rental Income โ Annual Operating Expenses.
- Operating expenses include property taxes, insurance, HOA fees, maintenance, and management (excluding mortgage principal and interest).
Step-by-Step Worked Example
Calculation Steps:
- Gross Rental Yield = ($29,400 รท $325,000) ร 100 = 9.05%
- Annual Net Rental Income = $29,400 โ $7,800 = $21,600
- Net Rental Yield = ($21,600 รท $325,000) ร 100 = 6.65%
How to Use This Calculator
- 1Enter the property purchase price or current market value.
- 2Enter the monthly gross rental income.
- 3Enter annual operating expenses (taxes, insurance, maintenance, HOA, management) to compare Gross Yield vs. Net Yield.
Assumptions & Limitations
- Net Rental Yield on an unleveraged basis is mathematically equivalent to the propertyโs Capitalization Rate (Cap Rate).
- Mortgage debt service is excluded so you can compare property performance independent of financing.
Frequently Asked Questions
What is the difference between gross rental yield and net rental yield?
Gross rental yield divides annual gross rent by the property price before any expenses. Net rental yield subtracts recurring operating expenses (taxes, insurance, maintenance, HOA, and management fees) from annual rent before dividing by the property price.
What is considered a good net rental yield?
Many residential real estate investors target a net rental yield between 5% and 8% depending on local market appreciation potential and current interest rates.
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