Calculate Gross Yield, Net Yield (Cap Rate), and Cash Flow instantly.
Gross Rental Yield:0.00%
Net Rental Yield (Cap Rate):0.00%
Total Annual Expenses:$0.00
Annual Net Operating Income (NOI):$0.00
Monthly Cash Flow:$0.00
Understanding Rental Yield: Gross vs. Net
When investing in real estate, determining the profitability of a property is crucial before making a purchase. Two of the most important metrics for landlords are Gross Rental Yield and Net Rental Yield.
What is Gross Rental Yield?
Gross Rental Yield provides a quick snapshot of the annual return on investment generated by a property, excluding expenses. It is calculated by dividing the total annual rental income by the property's purchase price and multiplying by 100.
Formula: (Annual Rent / Property Value) × 100
While useful for comparing properties quickly, it does not account for the costs associated with owning the property, such as taxes, insurance, and maintenance.
What is Net Rental Yield (Cap Rate)?
Net Rental Yield, often referred to as the Capitalization Rate (Cap Rate), gives a more accurate picture of profitability because it factors in operating expenses. This metric subtracts costs like property taxes, insurance, HOA fees, and vacancy losses from the rental income before calculating the return.
A "good" yield varies by location and property type, but generally:
Gross Yield: Investors often look for properties between 8% and 12%.
Net Yield (Cap Rate): A Cap Rate between 5% and 10% is typically considered solid. In high-demand urban areas, yields might be lower (3-5%) due to higher property values, while potential capital appreciation is higher.
Factors That Impact Your ROI
Using the calculator above, you can see how different variables affect your bottom line:
Vacancy Rates: A property that sits empty generates no income. Always factor in a vacancy allowance (typically 5-8%) to be safe.
HOA Fees: High homeowners association fees can significantly eat into your monthly cash flow, drastically reducing your Net Yield even if the rent is high.
Property Taxes: Tax rates vary wildly by county. Always verify the current tax assessment, not just what the previous owner paid.
By accurately inputting your expenses into the Rental Property Yield Calculator, you can make data-driven decisions and avoid properties that may look profitable on the surface but drain cash in reality.
function calculateRentalYield() {
// 1. Get Input Values
var propPrice = document.getElementById("propertyPrice").value;
var monthlyRent = document.getElementById("monthlyRent").value;
var annualTax = document.getElementById("annualTax").value;
var annualInsurance = document.getElementById("annualInsurance").value;
var monthlyHOA = document.getElementById("monthlyHOA").value;
var vacancyRate = document.getElementById("vacancyRate").value;
// 2. Validate Inputs
if (propPrice === "" || monthlyRent === "" || parseFloat(propPrice) <= 0) {
alert("Please enter a valid Property Price and Monthly Rent.");
return;
}
// 3. Parse Floats (handle empty fields as 0 for expenses)
var price = parseFloat(propPrice);
var rentMonth = parseFloat(monthlyRent);
var tax = annualTax === "" ? 0 : parseFloat(annualTax);
var ins = annualInsurance === "" ? 0 : parseFloat(annualInsurance);
var hoaMonth = monthlyHOA === "" ? 0 : parseFloat(monthlyHOA);
var vacRate = vacancyRate === "" ? 0 : parseFloat(vacancyRate);
// 4. Perform Calculations
var annualRentGross = rentMonth * 12;
// Calculate Vacancy Loss
var vacancyLoss = annualRentGross * (vacRate / 100);
// Annualize HOA
var annualHOA = hoaMonth * 12;
// Total Annual Expenses
var totalAnnualExpenses = tax + ins + annualHOA + vacancyLoss;
// Net Operating Income (NOI)
var noi = annualRentGross – totalAnnualExpenses;
// Gross Yield Formula: (Annual Gross Rent / Price) * 100
var grossYield = (annualRentGross / price) * 100;
// Net Yield Formula: (NOI / Price) * 100
var netYield = (noi / price) * 100;
// Monthly Cash Flow
var monthlyCashFlow = noi / 12;
// 5. Update HTML Results
document.getElementById("grossYieldResult").innerHTML = grossYield.toFixed(2) + "%";
document.getElementById("netYieldResult").innerHTML = netYield.toFixed(2) + "%";
// Format Currency
var currencyFormatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById("totalExpensesResult").innerHTML = currencyFormatter.format(totalAnnualExpenses);
document.getElementById("noiResult").innerHTML = currencyFormatter.format(noi);
document.getElementById("monthlyCashFlowResult").innerHTML = currencyFormatter.format(monthlyCashFlow);
// Show Results Area
document.getElementById("resultsArea").style.display = "block";
}