Rental Yield Calculator

Calculate gross and net rental yield for investment properties. Compare returns across properties to find the best opportunities.

$
$
$
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 do vacancy and expense levels affect your net yield on $350,000 at $24,000/yr gross rent?

Optimistic (5% vacancy, 25% exp)
4.89%
Gross: 6.86%
NOI: $17,100/yr
Cash flow: $1,425/mo
Realistic (8% vacancy, 35% exp)
4.10%
Gross: 6.86%
NOI: $14,352/yr
Cash flow: $1,196/mo
Stress (12% vacancy, 45% exp)
3.32%
Gross: 6.86%
NOI: $11,616/yr
Cash flow: $968/mo

Cash-on-cash return measures annual cash flow against your actual cash invested (down payment), accounting for mortgage financing.

$
%
yrs
Loan Amount
$280,000
$350,000 − $70,000 down
Monthly Mortgage
$1,863
Annual Debt Service
$22,354
Annual Cash Flow (after debt)
-$5,354
NOI minus mortgage payments
Cash-on-Cash Return
-7.65%
-$5,354 ÷ $70,000 invested
DSCR
0.76
Below 1.0 — income does not cover debt
Negative cash flow of $5,354/yr. The property is not generating enough rent to cover the mortgage and expenses.

How to Use This Rental Yield Calculator

Enter three figures to calculate your rental yield instantly:

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%

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 DuplexPhoenix SFR
Property Value$220,000$380,000
Annual Rent$22,800$26,400
Annual Expenses$6,000$9,000
Gross Yield10.4%6.9%
Net Yield7.6%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.

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