2020 Marginal Tax Rate Calculator

Investment Breakdown

Gross Rental Yield:

Net Rental Yield:

Monthly Cash Flow:

Annual Net Operating Income:

function calculateRentalResults() { var price = parseFloat(document.getElementById('purchasePrice').value); var rent = parseFloat(document.getElementById('monthlyRent').value); var taxes = parseFloat(document.getElementById('annualTaxes').value); var insurance = parseFloat(document.getElementById('annualInsurance').value); var maint = parseFloat(document.getElementById('monthlyMaintenance').value); var other = parseFloat(document.getElementById('otherCosts').value); if (isNaN(price) || isNaN(rent) || price <= 0) { alert("Please enter valid numbers for Purchase Price and Monthly Rent."); return; } var annualGrossIncome = rent * 12; var grossYield = (annualGrossIncome / price) * 100; var annualExpenses = taxes + insurance + ((maint + other) * 12); var annualNetIncome = annualGrossIncome – annualExpenses; var netYield = (annualNetIncome / price) * 100; var monthlyCashFlow = annualNetIncome / 12; document.getElementById('resGrossYield').innerText = grossYield.toFixed(2) + "%"; document.getElementById('resNetYield').innerText = netYield.toFixed(2) + "%"; document.getElementById('resMonthlyFlow').innerText = "$" + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resAnnualNOI').innerText = "$" + annualNetIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resultsArea').style.display = 'block'; }

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Understanding Rental Property Yield and Cash Flow

Successful real estate investing begins with accurate math. While many investors focus solely on the "Gross Yield," the most successful ones dive deep into the Net Operating Income (NOI) and monthly cash flow. This calculator helps you distinguish between what the property earns and what stays in your pocket after all expenses are paid.

Gross Yield vs. Net Yield

The Gross Rental Yield is a simple calculation: (Annual Rent / Purchase Price) x 100. It is a quick "back-of-the-napkin" metric to compare different properties. However, it ignores property taxes, insurance, and maintenance costs.

The Net Rental Yield is the true indicator of profitability. It subtracts all operating expenses from your annual income before dividing by the purchase price. A property with a high gross yield but massive tax and maintenance liabilities might actually have a lower net yield than a cheaper, lower-rent property in a low-tax area.

A Realistic Example

Consider an investment property with the following characteristics:

Category	Value
Purchase Price	$300,000
Monthly Rent	$2,200
Annual Expenses (Taxes, Ins, Maint)	$6,500

In this scenario, the Gross Yield is 8.8% ($26,400 / $300,000). However, after subtracting the $6,500 in annual expenses, the Net Operating Income (NOI) is $19,900. This results in a Net Yield of 6.63% and a monthly cash flow of $1,658.33.

Key Factors to Monitor

• Vacancy Rate: Always budget for at least 5-8% vacancy (time when the property is unrented).
• Property Management: If you aren't managing it yourself, expect to pay 8-12% of gross rent to a manager.
• Capital Expenditures (CapEx): Set aside funds for big-ticket items like a new roof or HVAC system.

Use this calculator to stress-test your investment assumptions before signing a contract. A positive cash flow property is the cornerstone of a sustainable real estate portfolio.