Rental Yield Calculator
Calculate the ROI on your investment property instantly.
How to Use the Rental Yield Calculator
Calculating rental yield is essential for any real estate investor looking to compare different properties. This tool provides two key metrics: Gross Yield and Net Yield. To get started, simply enter your property's total purchase price, the expected monthly rent, and your estimated annual carrying costs.
What is Gross Rental Yield?
Gross rental yield is the total annual rent received divided by the property purchase price. It is a "quick and dirty" calculation that doesn't account for expenses. While useful for initial screening, it can be misleading because it ignores the costs of owning the property.
Formula: (Annual Rent / Purchase Price) x 100
Understanding Net Rental Yield
Net rental yield provides a much more accurate picture of your investment's performance. It subtracts annual expenses like property taxes, insurance, management fees, and maintenance costs from your total annual rent before dividing by the purchase price.
Formula: [(Annual Rent – Annual Expenses) / Purchase Price] x 100
Real-World Example
Let's say you purchase a property for $500,000. You rent it out for $2,500 per month. Your annual property taxes, insurance, and repairs total $6,000.
- Annual Rent: $2,500 x 12 = $30,000
- Gross Yield: ($30,000 / $500,000) x 100 = 6.0%
- Net Rent: $30,000 – $6,000 = $24,000
- Net Yield: ($24,000 / $500,000) x 100 = 4.8%
Why Yield Matters in SEO for Real Estate
Property investors use rental yield as a primary filter when searching for high-growth areas. From an SEO perspective, understanding these financial metrics allows investors to target specific "cash flow" locations versus "capital growth" locations. A high net yield typically indicates a property that generates strong immediate cash flow, which is vital for long-term portfolio sustainability.