Rental Yield Calculator
Enter a property price and the rent it earns. This calculator gives you gross and net rental yield, cap rate, and payback period instantly — and can work backwards to the rent or price you need for a target yield.
Quick examples:
Use the purchase price for return on your money, or current market value to evaluate holding the property
$24,000.00/year gross scheduled rent
Maintenance, insurance, property tax, management, HOA, landlord-paid utilities — everything except mortgage payments
Share of the year the unit sits empty — reduces the rent you collect
Optional. When set, you also get gross and net yield on your all-in cost ($300,000.00)
Work backwards to the rent or price you need for a target yield
Yield is an unleveraged, pre-tax metric: mortgage payments, income tax, and depreciation are excluded. Rent and expenses are assumed constant for the year. Results are estimates, not financial advice.
Yield Results
Net Rental Yield
Gross Rental Yield
Cap Rate
Net Operating Income
Payback Period
Your net yield of 8.00% reads as High — verify the numbers. Unusually high yields often hide risk — double-check rent, expenses, and the neighborhood.
Yield Sensitivity
(rent and price ±10%)Related Calculators
How This Calculator Works
Rental yield answers one question: what return does the rent represent on the money tied up in a property? The calculator first annualizes your rent — weekly rent is multiplied by 52, monthly by 12 — then applies your vacancy assumption and operating expenses to produce a family of yield metrics. Everything is unleveraged and pre-tax: no mortgage, no income tax, no depreciation, so any two properties can be compared regardless of how they are financed.
Gross Rental Yield
Gross Yield = Annual Rent ÷ Property Value × 100
The fast, flattering number. It uses the full scheduled rent with no deduction for vacancy or expenses, which makes it ideal for a first-pass screen when comparing many listings quickly.
Net Operating Income (NOI)
NOI = Rent × (1 − Vacancy) − Operating Expenses
The property's realistic annual income. Vacancy trims the rent you actually collect, then operating expenses — taxes, insurance, maintenance, management, HOA — come out. Mortgage payments are deliberately excluded.
Net Yield & Cap Rate
Net Yield = Cap Rate = NOI ÷ Property Value × 100
The hero number. When you enter no purchase costs, net yield and cap rate are the same figure: the property's real earning power against its value. This is the number to decide with.
Yield on Cost & Payback
Yield on Cost = NOI ÷ (Value + Purchase Costs) × 100
Payback Years = Total Cost ÷ NOI
Add closing costs, transfer taxes, or rehab and you get the stricter all-in yield pair, plus how many years of NOI it takes to recoup your total investment.
Target Yield mode runs the same math in reverse: pick a gross or net goal and the calculator solves for the monthly rent required at your current price, and the maximum price you could pay at your current rent. All formulas are computed at full precision and cross-checked against standard industry definitions.
Reading the Net Yield Benchmark
The benchmark gauge above interprets your net yield against widely cited US rules of thumb. These bands are a starting point for conversation, not a verdict — a 3% yield in a supply-constrained coastal city and a 9% yield in a declining rust-belt town can both be rational or both be mistakes.
Low
Below 3%Common in expensive, high-appreciation markets. The rent barely covers costs, so the investment case usually rests on price growth rather than income.
Moderate
3–5%Typical for solid properties in strong metro areas. Steady but unspectacular income; sensitive to expense surprises and vacancy.
Solid
5–8%The range US sources most often describe as a healthy income return. Cash flow usually works even with conservative assumptions.
High — verify the numbers
Above 8%Attractive on paper, but unusually high yields often signal hidden risk: deferred maintenance, weak tenant demand, or optimistic rent estimates. Double-check every input.
Tips for Using Yield Well
Screen with Gross, Decide with Net
Gross yield is great for filtering a long list of candidates in seconds, but it hides the properties whose expenses eat the rent. Before making an offer, always enter realistic expenses and a vacancy assumption so the net yield — not the headline number — drives the decision.
Don't Guess Expenses — Use a Percentage Floor
If you don't have the actual tax, insurance, and maintenance figures yet, switch the expense field to percent mode. Many investors assume operating expenses of 20-35% of rent for a quick screen. Entering zero expenses gives you a gross yield wearing a net yield's badge.
Include Your Buying Costs
Closing costs, transfer taxes, and the initial rehab are real money you invested. Add them in the one-time purchase costs field to unlock the yield-on-cost pair — the stricter version of your return that seasoned investors quote. On a cheap property, $15,000 of rehab can move the yield by a full point.
Work Backwards from Your Target
Instead of asking "what yield does this listing give me?", flip it: turn on Target Yield mode and let the calculator tell you the maximum price that hits your goal at the asking rent. That number is a powerful anchor in a price negotiation — and the required-rent output is a sanity check on your rent projections.
Common Use Cases
Screening Listings in Minutes
ScreeningYou have a dozen candidate properties from a listings site. Enter price and asking rent for each, use percent-mode expenses at a flat assumption, and rank them by net yield. The two or three that survive the screen deserve a full underwriting pass in the Rental Property Cash Flow Calculator.
Comparing Two Different Markets
ComparisonA $500,000 condo renting for $2,600 and a $220,000 single-family home renting for $1,800 are hard to compare on price alone. Yield normalizes them: the condo grosses 6.2%, the house 9.8%. Run both with realistic expenses and vacancy to see whether the cheaper market really pays more after costs.
Setting Rent on a Property You Own
Rent SettingEnter the current market value of a property you already hold, switch on Target Yield mode with your required net return, and read off the rent that gets you there. If the required rent is far above market rents, the capital may be working harder if redeployed elsewhere.
Anchoring a Purchase Negotiation
NegotiationThe seller wants $340,000 and the unit rents for $2,200 a month. With your expense and vacancy assumptions and a 6% net target, the maximum-price output tells you exactly where your offer ceiling sits. Walking in with that number turns a feeling into a defensible position.
What This Calculator Assumes
Yield is deliberately a simple, comparable metric. To keep it that way, this tool makes a few explicit simplifications — knowing them helps you interpret the results correctly:
- •Constant annual figures: Rent and expenses are held flat for the year — no rent growth, no inflation, no multi-year projection. Yield is a snapshot of the property as it stands today.
- •No financing: Mortgage principal and interest are excluded on purpose. Yield and cap rate are unleveraged metrics so properties can be compared regardless of the buyer's loan. For loan payments, DSCR, and cash-on-cash return, use the Rental Property Cash Flow Calculator.
- •Pre-tax, no depreciation: Income taxes, depreciation schedules, and country- or state-specific rules are out of scope. Your after-tax return depends on your personal situation.
- •No appreciation: Results measure income return only. Any change in the property's value — up or down — is a separate component of your total return that this calculator does not model.
- •Vacancy trims rent, not expenses: The vacancy rate reduces the rent you collect, but operating expenses are assumed to continue in full — taxes and insurance don't pause when the unit is empty.
- •Two denominators: Cap rate is always computed on property value; the yield-on-cost pair uses value plus one-time purchase costs. With zero purchase costs the distinction disappears.
Disclaimer: Results are estimates for screening and planning, not financial advice. Benchmarks are rules of thumb that vary by market and property type. Before purchasing an investment property, verify all figures and consider consulting a qualified financial or real estate professional.
Frequently Asked Questions
How do you calculate rental yield?
Divide the annual rental income by the property value and multiply by 100. A $300,000 property renting for $2,000 a month earns $24,000 a year, which is an 8% gross yield. For net yield, subtract annual operating expenses from the rent before dividing. This calculator does both automatically and also annualizes weekly or monthly rent for you.
What is the difference between gross and net rental yield?
Gross yield uses the full scheduled rent and ignores costs, so it is quick but flattering. Net yield subtracts operating expenses — maintenance, insurance, property taxes, management, HOA — and applies your vacancy assumption first. Net yield is always lower and is the better number for comparing real returns. Most experienced investors screen with gross and decide with net.
What is a good rental yield?
There is no universal answer because it depends on market, property type, and risk. As a rule of thumb, US sources commonly describe 5-8% as a solid range, with net yields above roughly 4-5% considered healthy. Very high yields often signal hidden risk: deferred maintenance, weak tenant demand, or declining areas. Use the benchmark band in this calculator as a starting point, not a verdict.
What is the difference between rental yield and cap rate?
They are close cousins. Cap rate is net operating income divided by the property’s value, while net rental yield is often computed against your total acquisition cost, including closing costs and initial repairs. When you enter one-time purchase costs here, the calculator shows both so you can see how buying costs dilute your true return. With zero purchase costs, the two numbers are identical.
Should I use the purchase price or the current market value?
Use the purchase price (plus purchase costs) to measure the return on the money you actually put in, and the current market value to decide whether keeping the property still beats selling and redeploying the capital. Both are legitimate; they just answer different questions. This calculator lets you run either by changing the property value field.
Which expenses should I include in net yield?
Include everything it costs to operate the property: property taxes, insurance, maintenance and repairs, property management fees, HOA dues, and any utilities you pay as the landlord. Do not include mortgage principal or interest — yield is deliberately an unleveraged metric so properties can be compared regardless of how they are financed. If you want financing, cash flow, and DSCR, use our Rental Property Cash Flow Calculator.
Does rental yield include mortgage payments?
No. Yield and cap rate measure the property’s own earning power before financing, which is what makes them comparable across buyers with different loans. A property with a 6% net yield is a 6% net yield whether you pay cash or borrow 80%. Leverage changes your cash-on-cash return, not the yield — that analysis lives in the Rental Property Cash Flow Calculator.
How does vacancy affect my yield?
Every week the property sits empty is rent you never collect, so this calculator multiplies your annual rent by (1 − vacancy rate) before computing net yield and NOI. A 5% vacancy assumption on $24,000 of rent removes $1,200 a year. Gross yield is left un-haircut by convention so you can see the scheduled-rent picture next to the realistic one.
What is the payback period on a rental property?
It is the number of years of net operating income needed to recoup your total investment (price plus purchase costs), ignoring appreciation and rent growth. A property bought all-in for $312,000 producing $18,000 of NOI pays back in about 17.3 years. It is the inverse of your net yield on cost, and a fast way to sense-check whether a “great deal” really is one.
What rent do I need to hit a target yield?
Turn on Target Yield mode, choose gross or net, and enter your goal. The calculator solves the formula backwards: for a 6% net target on a $300,000 property with your expense and vacancy assumptions, it tells you the exact monthly rent required — and, at your current rent, the maximum price you could pay. This is useful when negotiating price or setting rent.