What should I include in annual costs?

Property management (8-12% of rent), maintenance and repairs (~1% of property value per year), homeowner's insurance ($1,000-2,500/year), property tax (0.5-2.5% of value depending on location), vacancy allowance (5-10% of annual rent), and any HOA fees. Fully-loaded expenses often run 35-45% of gross rent.

Gross yield vs net yield — which matters more?

Net yield always matters more — it's your actual return. Gross yield is useful for quick comparisons, but a 7% gross/3% net property in an expensive area might lose to a 6% gross/4.5% net property in a cheaper location. Always compare on net yield.

Is rental yield the only metric that matters?

No. Total return = net yield + annual capital appreciation. A 3% net yield property in a high-growth area might outperform a 7% yield property with flat values. Most investors in major cities accept 2-3% yield in exchange for 4-7% annual price growth.

How does leverage (mortgage) affect rental yield?

This calculator assumes a cash purchase. With a mortgage, your "cash-on-cash return" on the down payment can be much higher (or lower if interest rates are high). At 7% mortgage rates, a property yielding 5% net has negative leverage — you're paying more in interest than you're earning in rent, counting on appreciation to make up the difference.

Rental Yield Calculator

Calculate gross and net rental yield on any investment property.

Property Value

Monthly Rent

Annual Costs (maintenance, insurance, tax)

Net Rental Yield

6.33%

Gross Rental Yield8.00%

Annual Rental Income$24,000.00

Annual Net Income$19,000.00

Payback Period15.8 yrs

$300,000.00 property @ $2,000.00/mo = 8.00% gross, 6.33% net yield. Payback: 16 years.

A gross yield above 8% usually signals either high risk or high maintenance — dig into the details.

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Mortgage Calculator

Compare financing costs against this rental income

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About This Calculator

Rental yield is the annual rental income as a percentage of the property's value — the core metric for comparing property investments. Gross yield ignores costs; net yield is what actually matters for profitability. A property with a 6% gross yield might only deliver 3-4% net after maintenance, insurance, property management, and vacancy costs. Use this calculator to see your actual return before committing to a purchase.

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Frequently Asked Questions

What is a good rental yield?

In most US markets, 6-8% gross yield is good. Net yield is typically 3-5% after expenses. High-demand cities (NYC, SF) often have 2-4% gross yields but strong appreciation.

What costs should I include?

Property management (8-12% of rent), maintenance (1% of value/year), insurance, property tax, vacancy allowance (5-10%). When fully loaded, 35-45% of gross rent typically goes to expenses.

Gross vs net yield — which matters more?

Net yield — it's what you actually keep. A 7% gross/3% net property might lose to a 6% gross/4.5% net property in a cheaper location with lower expenses.

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For informational purposes only. Calculator results are estimates based on the inputs you provide. This is not financial, investment, tax, or legal advice. Consult a qualified financial professional before making major financial decisions.