Rental Yield Calculator
Calculate gross and net rental yield to evaluate the cash flow and investment viability of residential and commercial rental properties.
Calculator Inputs
LiveHow to use the Rental Yield Calculator
- 1Enter the total property value or purchase price.
- 2Enter the expected monthly rental income.
- 3Enter annual operating expenses (property taxes, insurance, repairs, vacancy factor).
- 4Review both Gross Rental Yield and Net Rental Yield percentages.
How Rental Yield is Calculated
Gross yield compares annual rental income directly to property value. Net yield subtracts annual operational expenses to reflect real cash return.
- Annual Rent is Monthly Rent × 12.
- Property Value includes purchase price and acquisition costs.
- 1Annual Rent = $1,800 × 12 = $21,600
- 2Gross Yield = ($21,600 / $300,000) × 100 = 7.20%
- 3Net Income = $21,600 - $3,600 = $18,000
- 4Net Yield = ($18,000 / $300,000) × 100 = 6.00%
What affects Rental Yield results
- Tenant vacancy periods between leases.
- Property management fees (typically 8% to 10% of monthly rent).
- Capital expenditure for structural maintenance.
Frequently Asked Questions
What is considered a good rental yield?
Generally, a gross rental yield between 5% and 8% is considered healthy for residential real estate, while commercial real estate often targets 7% to 10%.
Why is net rental yield more realistic than gross yield?
Gross yield ignores taxes, maintenance, and insurance. Net yield reflects actual operational cash flow generated after mandatory property upkeep.
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