Productive ToolboxRental Yield Calculator
Calculate gross and net rental yield, monthly cash flow, and ROI for investment properties. Includes vacancy adjustment and expense breakdown.
Rental Yield Calculator
Calculate gross and net rental yield, monthly cash flow, and ROI for investment properties. Includes vacancy adjustment and full expense breakdown.
Settings
Typical: 5% for most markets
Gross Rental Yield
Property Details
Mortgage (Optional)
Annual Expenses (Optional)
Click Show to add property tax, insurance, maintenance, and management fees.
Quick Presets
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What is a Rental Yield Calculator?
A Rental Yield Calculator measures the annual return on a rental property as a percentage of its purchase price. It is one of the most important metrics for property investors, helping them compare investment opportunities and assess whether a property generates sufficient income relative to its cost.
This calculator computes both gross rental yield (based on rent alone) and net rental yield (after deducting property tax, insurance, maintenance, management fees, and HOA costs). It also applies a vacancy rate adjustment to account for periods when the property is unoccupied.
Optional mortgage inputs enable monthly cash flow analysis — showing whether the property generates positive or negative cash flow after all expenses and debt service. The cash-on-cash return metric shows the annual return relative to your actual cash invested (down payment).
How to Use the Rental Yield Calculator
- 1Enter the price and rent: Type the property price and the monthly rent, and pick your currency.
- 2Set the vacancy rate: Use the slider for the share of the year you expect the property to be empty.
- 3Add annual expenses: Open annual expenses and type property tax, insurance, maintenance, management fees and HOA or service charges.
- 4Add the mortgage: Optionally type the down payment, interest rate and term for cash flow and cash-on-cash return.
- 5Read the results: See gross and net yield, yields after vacancy, monthly cash flow, cash-on-cash return and a rating.
Rental Yield Formulas
| Metric | Formula | Example |
|---|---|---|
| Gross Yield | (Annual Rent ÷ Price) × 100 | ($21,600 ÷ $200,000) × 100 = 10.8% |
| Net Yield | ((Annual Rent − Expenses) ÷ Price) × 100 | ($21,600 − $6,000) ÷ $300,000 = 5.2% |
| Vacancy-Adj. Rent | Annual Rent × (1 − Vacancy Rate) | $24,000 × 0.95 = $22,800 |
| Monthly Cash Flow | Monthly Rent − Monthly Expenses − Mortgage | $1,800 − $500 − $760 = +$540 |
| Cash-on-Cash ROI | (Annual Cash Flow ÷ Down Payment) × 100 | ($6,480 ÷ $50,000) × 100 = 13% |
Rental Yield Benchmarks
| Net Yield | Rating | Interpretation |
|---|---|---|
| 9%+ | Excellent | Outstanding return — verify expenses and vacancy assumptions |
| 7–9% | Strong | Above-average return — good investment candidate |
| 5–7% | Average | Typical for most residential markets |
| 3–5% | Below Average | Low return — consider appreciation potential |
| < 3% | Poor | Negative or minimal cash flow — high risk |
Who Uses This Calculator?
Property Investors
Compare rental yields across multiple properties to identify the best investment.
Landlords
Assess whether current rent covers expenses and generates positive cash flow.
Real Estate Buyers
Evaluate rental income potential before purchasing an investment property.
Financial Planners
Model rental property returns for clients building passive income portfolios.
Mortgage Researchers
Analyze whether rental income covers mortgage payments and operating costs.
First-Time Investors
Understand rental yield metrics before making a first investment property purchase.
Frequently Asked Questions
How is rental yield calculated?
Gross yield = annual rent ÷ price × 100. Net yield = (annual rent − annual expenses) ÷ price × 100. A $300,000 property renting for $2,000 a month has an 8% gross yield; with $6,000 a year of expenses the net yield is 6%.
What is a good rental yield?
It varies by market. A net yield around 5–7% is typical for residential property; much higher yields often come with more risk, lower-demand areas or underestimated costs.
How does vacancy affect the result?
A 5% vacancy rate is about 18 empty days a year and cuts rent by 5%: $24,000 a year becomes $22,800. The vacancy-adjusted yields and the cash flow include it.
What is cash-on-cash return?
Annual cash flow after expenses and mortgage payments, divided by the cash you put in. $6,000 a year of cash flow on a $50,000 down payment is 12%.
Are mortgage payments included in yield?
No. Yield is measured before financing so properties can be compared however they are bought. Mortgage payments are included in cash flow and cash-on-cash return.
Which expenses should I include?
Property tax, insurance, maintenance (often budgeted at 1–2% of the value a year), management fees and HOA or service charges. Leave out mortgage payments.
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