Rental Yield Calculator
By Talcart · Last updated July 10, 2026
Rental Yield Calculator Guide
Understanding Rental Yield
Gross Yield Formula
- Gross Yield = (Annual Rental Income / Property Value) × 100
- Example: ($24,000 annual rent / $400,000 property) × 100 = 6%
Net Yield Formula
- Net Yield = ((Annual Rent - Expenses) / Property Value) × 100
- Example: ($24,000 rent - $4,000 expenses) / $400,000 × 100 = 5%
Rental Yield Calculator
This rental yield calculator shows what percentage of a property's price comes back as rent each year: $2,000 per month on a $400,000 property is a 6% gross yield. Enter rent and property value for gross yield, then add running costs to see the net figure investors actually compare.
Key facts
- $2,000 per month in rent on a $400,000 property equals exactly a 6% gross yield ($24,000 / $400,000).
- Raising rent from $1,500 to $1,650 per month on a $300,000 property lifts gross yield from 6.0% to 6.6%.
- Every $100 of monthly rent adds 0.3 percentage points of gross yield on a $400,000 property, or 0.48 points on a $250,000 one.
What is the Rental Yield Calculator?
Rental yield is a property's annual rental income expressed as a percentage of its purchase price or market value. Gross yield uses rent alone; net yield subtracts operating costs such as maintenance, insurance, property taxes, management fees, and vacancy before dividing by the price. Yield measures income generation only — it deliberately ignores capital growth — which makes it the standard first-pass metric for screening and comparing rental investments across different price brackets and cities.
How does the Rental Yield Calculator work?
The calculator annualizes your rent (monthly rent x 12, or weekly rent x 52), divides by the property value, and multiplies by 100: Gross Yield = (Annual Rent / Property Value) x 100. For net yield it first deducts your itemized annual expenses from the rent, so Net Yield = ((Annual Rent - Annual Costs) / Property Value) x 100. Because price sits in the denominator, a cheaper property at the same rent always shows a higher yield.
What is the Rental Yield Calculator formula?
- Annual Rent – total yearly rent
- Property Value – purchase price or current market value
Monthly rent needed to reach a target gross yield
| Target gross yield | On a $250,000 property | On a $400,000 property |
|---|---|---|
| 4% | $833 / month | $1,333 / month |
| 5% | $1,042 / month | $1,667 / month |
| 6% | $1,250 / month | $2,000 / month |
| 7% | $1,458 / month | $2,333 / month |
| 8% | $1,667 / month | $2,667 / month |
How do you use the Rental Yield Calculator?
- Enter monthly or annual rent.
- Enter property value.
- Optional: add expenses for net yield.
Worked example
| Scenario | $24,000 annual rent on a $400,000 property |
| Calculation | 24,000 / 400,000 × 100 |
| Result | Gross yield 6%. |
Common use cases
Tips & best practices
Gross yield is for screening; always run net yield before you buy.
Frequently asked questions
A gross rental yield of 5-8% is generally considered solid in stable markets, though the norm varies widely by city. Expensive capital-city markets often yield 3-4% gross with more capital growth, while regional or higher-risk areas can exceed 8%. Always judge a yield against comparable properties in the same location.
Multiply the monthly rent by 12, divide by the property value, and multiply by 100. A home renting for $1,500 a month that cost $300,000 yields (1,500 x 12) / 300,000 x 100 = 6% gross. For net yield, subtract annual running costs from the rent before dividing.
Gross yield uses rental income alone, while net yield subtracts operating expenses first, so net is always lower. If a $400,000 property earns $24,000 in rent (6% gross) but costs $6,000 a year to run, its net yield is 18,000 / 400,000 = 4.5%. Use gross for quick screening and net for purchase decisions.
Yes — for net yield, assume the property sits empty at least 5% of the year (about 2.6 weeks). On $24,000 of annual rent, a 5% vacancy allowance removes $1,200 of income, which alone trims a 6% gross yield on a $400,000 property by 0.3 percentage points.
No. Rental yield measures annual rent against the full property value, while ROI measures total profit — rent plus price appreciation, minus all costs — against the cash you actually invested. A leveraged buyer with a 20% deposit can earn a cash-on-cash ROI far above the property's 5-6% yield.
Yes, because both inputs move. If rents rise while the value is measured at your original purchase price, yield-on-cost climbs; if the market value grows faster than rents, yield on current value falls. Recalculating yearly with current figures shows whether the property still earns its keep.