Rental Yield Calculator
Calculate gross and net rental yield for investment properties. Compare returns across properties to find the best opportunities.
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Gross Rental Yield
6.86%
Before expenses
Net Rental Yield
4.86%
Monthly Cash Flow
$1,417
Annual Net Income
$17,000
Expense Ratio
29.2%
Gross yield = Annual rent / Property value. Net yield = (Annual rent − Expenses) / Property value. Net yield of 4-6%+ is typically considered attractive.
How to Use This Rental Yield Calculator
Enter three figures to calculate your rental yield instantly:
- Property Value: Current market value or purchase price. Use a consistent value when comparing properties.
- Annual Rental Income: Total gross rent collected per year (monthly rent × 12). Use market rent for vacant properties.
- Annual Expenses: All operating costs: property taxes, landlord insurance, property management, maintenance, vacancy allowance, and any other costs. Do NOT include mortgage payments.
The calculator shows both gross yield (no expenses deducted) and net yield (after expenses), plus monthly cash flow and expense ratio.
Gross vs Net Rental Yield
Gross Rental Yield = (Annual Rent / Property Value) × 100
Net Rental Yield = ((Annual Rent − Annual Expenses) / Property Value) × 100
Example: $350,000 property, $24,000 rent, $7,000 expenses
Gross Yield = ($24,000 / $350,000) × 100 = 6.86%
Net Yield = ($17,000 / $350,000) × 100 = 4.86%
Net Rental Yield = ((Annual Rent − Annual Expenses) / Property Value) × 100
Example: $350,000 property, $24,000 rent, $7,000 expenses
Gross Yield = ($24,000 / $350,000) × 100 = 6.86%
Net Yield = ($17,000 / $350,000) × 100 = 4.86%
Always use net yield for real decisions. Gross yield is easy to compare but ignores the true cost of ownership. The gap between gross and net is typically 2-3 percentage points for a well-managed residential property.
Example: Two Properties Compared
Indianapolis Duplex vs Phoenix SFR
| Indianapolis Duplex | Phoenix SFR | |
| Property Value | $220,000 | $380,000 |
| Annual Rent | $22,800 | $26,400 |
| Annual Expenses | $6,000 | $9,000 |
| Gross Yield | 10.4% | 6.9% |
| Net Yield | 7.6% | 4.6% |
| Monthly Cash Flow* | +$567 | +$292 |
*Before mortgage payment. The Indianapolis duplex has significantly better yields — typical of Midwest markets where property prices are lower relative to rents.
Frequently Asked Questions
A good net rental yield is typically 4-6%+ for residential properties. In major US cities, 3-5% net is common due to high property values. In smaller cities and Midwest markets, 6-10% net yields are achievable. Gross yields are 1-3% higher. Compare yields to local alternatives — sometimes a local index fund or bonds offer comparable returns with less work.
Net rental yield and cap rate are essentially the same metric calculated the same way: NOI / Property Value. "Yield" is the preferred term in the UK and Australia; "cap rate" is standard in US commercial real estate. For US residential properties, both terms are used interchangeably.
Strategies: raise rents to market rate (if below market), reduce vacancy through better tenant screening, self-manage instead of paying a property manager (saves 8-12%), add amenities that justify premium rent, buy in higher-yield markets, or buy below market value to improve yield ratio. Adding units (ADU, garage conversion) can dramatically improve yield.
It's a classic cash flow vs appreciation tradeoff. High-yield markets (Midwest, Southeast) provide stronger cash flow and immediate returns. Low-yield markets (NYC, SF, LA) offer potentially higher appreciation but thin or negative cash flow. Neither is universally better — it depends on your investment goals, risk tolerance, and how long you plan to hold.