Rental Yield Calculator
Calculate gross and net rental yield on an investment property.
Please note: Estimates only, not investment or legal advice. Property markets, taxes, fees and lending rules vary by location and change over time. Verify figures with a qualified professional before committing.
What the Rental Yield Calculator does
Rental yield expresses annual rent as a percentage of property value. Gross yield uses rent alone; net yield subtracts running costs and vacancy. The gap between them is often three or four percentage points, which is why gross yield alone is a poor basis for a decision.
Formula
Gross yield = (Monthly rent × 12) ÷ Property value × 100Effective rent = Gross annual rent × (1 − Vacancy rate)Net yield = (Effective rent − Annual costs) ÷ Property value × 100
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Property value or purchase price | selected currency | Yes | Accepts more than 0. |
| Monthly rent | selected currency | Yes | Accepts more than 0. |
| Annual running costs | selected currency | Optional | Management, maintenance, insurance, service charges. Accepts 0 or more. |
| Annual property tax | selected currency | Optional | Accepts 0 or more. |
| Vacancy allowance | % | Optional | Percent of the year the property sits empty. |
| Purchase costs | selected currency | Optional | Stamp duty, legal fees, survey — used for yield on total outlay. Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Property value or purchase price and Monthly rent.
- Optionally add Annual running costs, Annual property tax and Vacancy allowance.
- Select Calculate.
Worked example
A $320,000 property renting at $1,850 a month, $4,200 running costs, $3,400 property tax, 5% vacancy.
- Value
- 320000
- Rent
- 1850
- Expenses
- 4200
- Tax
- 3400
- Vacancy
- 5
Gross yield 6.94%, effective rent $21,090, net income $13,490 — a net yield of 4.22%.
Reading the result
- Watch "costs as % of rent" over time rather than only the yield figure — a rising cost ratio erodes net yield before the headline percentage visibly moves, so it is an earlier warning sign.
- The "yield at different purchase prices" table is a negotiating tool as much as a projection: it shows exactly how much room exists before a lower offer meaningfully changes the return.
Assumptions and limitations
- Rent is treated as a flat monthly amount for the whole year, and vacancy as a smooth percentage haircut rather than actual void months — a single two-month vacancy reads identically here to scattered short gaps.
- Purchase costs, when entered, are a single user-supplied figure rather than a jurisdiction-specific calculation — they are not verified against local stamp duty or legal-fee scales.
Common mistakes
- Comparing two properties on gross yield alone, which ignores cost structure entirely — an older building with higher maintenance can show a higher gross yield than a newer one and still net less.
- Comparing net yields calculated with different vacancy assumptions as if they were like-for-like — a property assessed at 0% vacancy will always look better than an identical one assessed at 5%, regardless of the properties themselves.
Frequently asked questions
What is a good rental yield?
It depends heavily on the market. Net yields of 5%+ are strong in most developed markets; prime city centres often yield 2–3% with growth expected to make up the difference.
Should I use purchase price or current value?
Purchase price shows the return on what you actually paid. Current value shows whether the capital is still working hard where it sits — a low current-value yield can be a signal to sell.