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Rental Yield Calculator

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Your Investment Summary

Annual Rental Income: $0

Gross Rental Yield: 0%

Net Rental Yield: 0%

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Understanding Property Rental Yield

Rental yield is a critical metric for real estate investors. It represents the annual return on investment (ROI) generated by a property through rental income, expressed as a percentage of the property's value.

Gross Yield vs. Net Yield

Gross Rental Yield is the total annual rent divided by the purchase price. It is a quick way to compare different properties but doesn't account for the costs of owning the property.

Net Rental Yield is the more accurate figure. It subtracts annual operating expenses (such as property taxes, maintenance, insurance, and vacancy costs) from the total rent before dividing by the purchase price. This gives you a realistic view of the actual cash flow staying in your pocket.

How to Calculate It

The formulas used by this calculator are:

• Gross Yield = (Annual Rental Income / Property Price) × 100
• Net Yield = ((Annual Rental Income – Annual Expenses) / Property Price) × 100

Example Calculation

Suppose you purchase a property for $500,000 and rent it out for $2,500 per month. Your annual expenses total $6,000.

• Annual Rent: $2,500 × 12 = $30,000
• Gross Yield: ($30,000 / $500,000) × 100 = 6.0%
• Net Income: $30,000 – $6,000 = $24,000
• Net Yield: ($24,000 / $500,000) × 100 = 4.8%

What is a Good Rental Yield?

While "good" varies by market, most professional investors aim for a net yield of 5% to 8%. In high-demand metropolitan areas, yields may be lower (2-4%), but investors often expect higher capital growth (property value appreciation) to compensate.

function calculateRentalYield() { var price = parseFloat(document.getElementById('propertyPrice').value); var monthlyRent = parseFloat(document.getElementById('monthlyRent').value); var expenses = parseFloat(document.getElementById('annualExpenses').value); // 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 rent amount."); return; } if (isNaN(expenses) || expenses < 0) { expenses = 0; } var annualRent = monthlyRent * 12; var grossYield = (annualRent / price) * 100; var netYield = ((annualRent – expenses) / price) * 100; // Display results document.getElementById('resAnnualIncome').innerText = "$" + annualRent.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resGrossYield').innerText = grossYield.toFixed(2) + "%"; document.getElementById('resNetYield').innerText = netYield.toFixed(2) + "%"; document.getElementById('yield-results').style.display = 'block'; }