Rental Yield Calculator

Gross yield = annual rent ÷ property value × 100. Net yield = (annual rent − vacancy − operating expenses) ÷ value × 100, or ÷ total invested if you include purchase costs. Net yield on current market value is, in effect, the cap rate.

Gross yield, net yield, and why both matter

Rental yield expresses a property’s income as a percentage of its value, and it comes in two flavours. Gross yield — annual rent divided by price — is the back-of-envelope number you see in listings and use to screen dozens of properties quickly. It is useful precisely because it ignores costs: it puts every property on the same simple footing. Net yield divides the income left after operating expenses and vacancy by the value, and it is the one that tells you what the property actually earns. The gap between the two is your cost load, and it varies a lot — a high gross yield can shrink to a mediocre net yield once management, maintenance, tax and vacancy are paid.

This calculator shows both, plus the net operating income behind the net yield. Enter just the price and rent for a quick gross figure; add the expense fields for the net yield and a full breakdown of where the rent goes.

Worked example — a $300,000 property renting at $2,000 a month: Gross yield is $24,000 ÷ $300,000 = 8.0%. After ~$7,500 of operating expenses and a 5% vacancy allowance, net operating income is about $15,300 — a net yield of roughly 5.1%.

Yield on cost vs yield on current value

If you have owned a property for a while, there are two values you could measure yield against, and they answer different questions. Yield on cost uses what you paid — it tells you how the original investment is performing. Yield on current value uses today’s market price — it tells you the return the property would offer a buyer now, and whether your capital is still working hard where it sits. As a property appreciates, yield on current value falls even as yield on cost holds steady, which is often the signal that prompts investors to sell or refinance and redeploy.

Enter a current market value alongside the purchase price and the calculator shows both. The net yield on current value is, in effect, the capitalisation rate — the standard unleveraged yardstick for comparing income properties — which links this quick screen to the fuller cap-rate and ROI analysis.

What yield does and doesn’t tell you

Yield is a screen, not a verdict. It deliberately ignores financing, so it says nothing about your cash-on-cash return once a mortgage is involved, and it ignores appreciation and loan paydown, which for many investors are the larger part of the total return. A property with a modest yield in an appreciating area can outperform a high-yield property in a stagnant one. Use yield to shortlist and compare; use a full ROI analysis — cash flow, appreciation, paydown and sale — to decide.

Be honest with the expense inputs, too. The most common mistake is omitting vacancy and management, which flatters the net yield. Including purchase costs in the base (closing and rehab) gives a stricter, more realistic figure — the yield on the cash you actually committed, not just the sticker price. Tune the assumptions to your market and the net yield becomes a reliable comparison tool.