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Rental Yield Calculator

Calculate your property's gross and net investment returns

Gross Rental Yield: 0.00%
Net Rental Yield: 0.00%
Monthly Net Cash Flow: $0.00

Understanding Rental Yield for Property Investors

Rental yield is a crucial metric for real estate investors to evaluate the potential return on a property investment. It represents the annual rental income as a percentage of the property's value.

Gross Yield vs. Net Yield

Gross Rental Yield is the simplest calculation. It only considers the total rent collected against the purchase price. While useful for a quick comparison, it doesn't account for the costs of running the property.

Net Rental Yield is a more accurate reflection of your return. It subtracts all annual expenses—such as taxes, insurance, and maintenance—from the annual rent before dividing by the property price. Most professional investors aim for a net yield between 5% and 8%, though this varies by market and property type.

Rental Yield Example Calculation

  • Purchase Price: $400,000
  • Monthly Rent: $2,000 ($24,000 annually)
  • Total Annual Expenses: $5,000 (Tax, Insurance, Repairs)
  • Gross Yield: ($24,000 / $400,000) × 100 = 6%
  • Net Yield: (($24,000 – $5,000) / $400,000) × 100 = 4.75%

How to Improve Your Yield

Investors can increase their yield by negotiating a lower purchase price, increasing monthly rent through renovations, or minimizing operating expenses like property management fees or insurance premiums.

function calculateRentalYield() { var price = parseFloat(document.getElementById("purchasePrice").value); var monthlyRent = parseFloat(document.getElementById("monthlyRent").value); var taxes = parseFloat(document.getElementById("annualTaxes").value) || 0; var insurance = parseFloat(document.getElementById("annualInsurance").value) || 0; var maintenance = parseFloat(document.getElementById("annualMaintenance").value) || 0; var other = parseFloat(document.getElementById("annualOther").value) || 0; if (isNaN(price) || isNaN(monthlyRent) || price <= 0) { alert("Please enter valid numbers for price and rent."); return; } var annualRent = monthlyRent * 12; var annualExpenses = taxes + insurance + maintenance + other; // Gross Yield Calculation var grossYield = (annualRent / price) * 100; // Net Yield Calculation var netYield = ((annualRent – annualExpenses) / price) * 100; // Monthly Cash Flow var monthlyCashFlow = (annualRent – annualExpenses) / 12; // Display Results document.getElementById("grossYieldResult").innerHTML = grossYield.toFixed(2) + "%"; document.getElementById("netYieldResult").innerHTML = netYield.toFixed(2) + "%"; document.getElementById("cashFlowResult").innerHTML = "$" + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("resultsArea").style.display = "block"; }

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