Rental Yield Calculator
Calculate the gross and net returns on a rental property.
How this is calculated
Gross yield is annual rent divided by purchase price. Net yield also deducts vacancy loss and maintenance from the rent, and adds purchase costs to the price, for a more realistic return figure. The gap between the two is usually meaningful — gross yield is what gets advertised, but net yield is what you actually earn once the property's real running costs are accounted for.
Using this calculator's defaults — a $300,000 purchase price, $1,800 monthly rent, 5% vacancy rate, $3,000 annual maintenance, and 3% purchase costs — gross yield is ($1,800 × 12) / $300,000 = 7.2%. Net yield adjusts the rent down for vacancy and maintenance ($21,600 × 95% − $3,000 = $17,520) and the price up for purchase costs ($300,000 × 1.03 = $309,000), giving a net yield of $17,520 / $309,000 ≈ 5.67% — noticeably lower than the headline 7.2% gross figure. To compare this income return against simply buying to live in the property, see the Rent vs Buy calculator, and to check the purchase price against income-based affordability benchmarks, see the House Price to Income calculator.
Frequently asked questions
- What's the difference between gross and net yield?
- Gross yield is annual rent divided by purchase price — a quick top-line number. Net yield also accounts for vacancy, maintenance costs, and one-off purchase costs, giving a more realistic return.
- Does this include mortgage financing costs?
- No — this is a pure rental-income yield calculation. If you're financing the purchase, your actual cash-on-cash return will be lower once mortgage interest is factored in.
- What is rental yield?
- Rental yield measures the annual rental income a property generates as a percentage of its value — it is the standard way to compare the income return of different rental properties, independent of how the purchase was financed.
- What is the difference between gross and net rental yield?
- Gross yield is simply annual rent divided by purchase price — a quick, comparable top-line figure. Net yield goes further, deducting vacancy losses and maintenance costs from the rent and adding purchase costs to the price, giving a more realistic picture of the actual return.
- What is a good rental yield?
- Gross yields of 5–8% are commonly considered attractive for a rental investment, though "good" varies significantly by location, property type, and how much price appreciation you expect on top of the rental income — high-yield areas often have lower expected capital growth, and vice versa.
- How does rental yield vary by country and city?
- Yields are generally higher in lower-priced markets and lower in expensive, high-demand cities where buyers are partly paying for expected capital appreciation rather than income — prime central locations in major global cities often yield 2–4%, while regional or emerging markets can yield 7%+.
- What costs reduce net yield from gross yield?
- Vacancy periods (time the property sits unrented), ongoing maintenance and repairs, and one-off purchase costs (fees, taxes, legal costs) all reduce net yield below the headline gross figure — which is why net yield is usually meaningfully lower than gross yield.
- How does rental yield compare to other investment returns?
- Rental yield is comparable to a dividend yield or bond coupon — it measures income return only, not total return. A full comparison against other investments should also account for expected capital appreciation, liquidity, leverage effects, and the ongoing management burden of owning property. See the Rent vs Buy calculator for a fuller comparison.