function calculateRentalYield() {
// 1. Get input values
var price = parseFloat(document.getElementById('ryc_price').value);
var monthlyRent = parseFloat(document.getElementById('ryc_rent').value);
var annualExpenses = parseFloat(document.getElementById('ryc_expenses').value);
var vacancyRate = parseFloat(document.getElementById('ryc_vacancy').value);
// 2. Validation
if (isNaN(price) || price <= 0) {
alert("Please enter a valid Property Purchase Price.");
return;
}
if (isNaN(monthlyRent) || monthlyRent <= 0) {
alert("Please enter a valid Monthly Rental Income.");
return;
}
if (isNaN(annualExpenses) || annualExpenses < 0) {
annualExpenses = 0; // Default to 0 if empty/invalid
}
if (isNaN(vacancyRate) || vacancyRate < 0) {
vacancyRate = 0; // Default to 0 if empty/invalid
}
// 3. Calculation Logic
// Annual Gross Rent
var annualGrossRent = monthlyRent * 12;
// Gross Yield = (Annual Rent / Price) * 100
var grossYield = (annualGrossRent / price) * 100;
// Calculate Vacancy Loss
var vacancyLoss = annualGrossRent * (vacancyRate / 100);
// Effective Gross Income
var effectiveGrossIncome = annualGrossRent – vacancyLoss;
// Net Operating Income (NOI) = Effective Income – Expenses
var netOperatingIncome = effectiveGrossIncome – annualExpenses;
// Net Yield (Capitalization Rate) = (NOI / Price) * 100
var netYield = (netOperatingIncome / price) * 100;
// Monthly Cash Flow (Pre-Mortgage)
var monthlyCashFlow = netOperatingIncome / 12;
// 4. Update UI
// Helper function for currency formatting
var currencyFormatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('ryc_gross_yield').innerHTML = grossYield.toFixed(2) + "%";
document.getElementById('ryc_net_yield').innerHTML = netYield.toFixed(2) + "%";
document.getElementById('ryc_noi').innerHTML = currencyFormatter.format(netOperatingIncome);
document.getElementById('ryc_monthly_cf').innerHTML = currencyFormatter.format(monthlyCashFlow);
// Show the result div
document.getElementById('ryc_result').style.display = "block";
}
Understanding Rental Property Yield
Rental yield is one of the most important metrics for real estate investors. It measures the return you generate on a property based on the rental income it provides relative to the purchase price. By using our Rental Property Yield Calculator, you can quickly assess whether an investment property is worth your capital compared to other opportunities.
Gross Yield vs. Net Yield
When analyzing a deal, it is crucial to understand the difference between Gross and Net Yield:
Gross Yield: This is a quick calculation that looks only at total annual rent divided by the property price. It does not account for expenses like taxes, insurance, or maintenance.
Net Yield (or Cap Rate): This gives a much more accurate picture of profitability. It subtracts all operating expenses and vacancy losses from the income before dividing by the purchase price.
How to Calculate Rental Yield
The formulas used in the calculator above are industry standard for evaluating residential and commercial real estate.
As you can see, the Net Yield provides a more realistic expectation of your return on investment. Use the calculator above to run your own numbers before making an offer on a property.