Rental Yield Calculator
Wondering whether a property is worth buying to rent out? This free rental yield calculator shows your gross and net rental yield instantly — the annual return a rental property earns relative to its price — so you can compare deals honestly before you buy.
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How to use this calculator
Start with the two big numbers: the monthly rent the property can realistically collect, and the full purchase price (including closing costs, if you want the most honest figure). Hit calculate and you'll see both yields instantly — no account, no spreadsheet needed.
Then add the annual expenses to unlock the net figure. Property tax and insurance come straight from your quotes; maintenance is often budgeted at 1% of the property's value per year. The vacancy allowance covers the months the unit sits empty between tenants — 5–10% of annual rent is typical. Enter HOA or strata dues if the property has them.
Compare properties by net yield, not gross: a "10% yield" can shrink to 5% once real costs are in. Also remember this is a snapshot of today's income — it says nothing about future rent growth or price appreciation.
How it works
Gross rental yield = (annual rent ÷ property price) × 100. Annual rent is just monthly rent × 12. Example: a $300,000 property rented at $1,800 a month gives $21,600 ÷ $300,000 × 100 = 7.2%.
Net rental yield = ((annual rent − annual expenses) ÷ property price) × 100, where annual expenses = property tax + insurance + maintenance + (vacancy allowance % × annual rent) + (HOA × 12). This is the same math as a cap rate for an all-cash buyer.
Assumptions and limitations: results are planning estimates, not investment advice. Mortgage payments, closing costs, income tax, property management fees, and future rent or price changes are not included. Actual returns vary with your market, financing, and tenant history. This is general information, not financial advice.
Frequently asked questions
How do you calculate rental yield?
Divide the annual rent by the property price and multiply by 100. A $300,000 property renting for $1,800 a month ($21,600 a year) has a gross rental yield of 7.2%. Net rental yield uses the same formula after subtracting annual expenses from the rent.
What is the difference between gross and net rental yield?
Gross rental yield is annual rent divided by the property price, before any costs. Net rental yield subtracts real operating costs first — property tax, insurance, maintenance, vacancy allowance and HOA fees — so it reflects the return you actually keep. Net yield is the figure to use when comparing investments.
What is a good rental yield?
As a rough rule of thumb, a net rental yield of 4–8% is typical for residential property, with cheaper markets and higher rents sitting at the top end and expensive coastal cities at the bottom. The right target depends on interest rates, your financing costs and how much appreciation you expect. This is general information, not financial advice.
Is rental yield the same as cap rate?
Effectively yes for an all-cash buyer: cap rate is net operating income divided by the property price, which is exactly the net rental yield formula. Both ignore mortgage payments, so they measure the property's own performance rather than your return on cash invested with financing.
What expenses should I include in net rental yield?
Include the recurring costs of owning and operating the property: annual property tax, landlord insurance, maintenance and repairs, a vacancy allowance for months without a tenant (often 5–10% of rent), and any HOA or strata fees. Mortgage payments and one-off closing costs are normally left out of the yield calculation.