Use this rental yield calculator to show how much profit you make from a rental property compared to what you paid for it.
Rental Yield Calculator
Estimate your return on investment (ROI) and cash flow
Common Questions About Rental Yield
What is a good rental yield?
What is the difference between Gross and Net Yield?
Net Yield factors in all costs (taxes, insurance, maintenance, vacancies). It provides a much more accurate picture of your actual return on investment. Always use Net Yield for decision making.
What is the “1% Rule” in real estate?
How is Cap Rate different from Rental Yield?
Why is Vacancy Rate important?
What Is a Rental Yield Calculator
A rental yield calculator shows how much profit you make from a rental property compared to what you paid for it. It considers your rent income and subtracts all your costs like taxes, insurance, and repairs. The result shows you a percentage that tells whether the property is a good investment or not.
Input Fields Explained in the Rental Yield Calculator
Property Purchase Price
Enter what you paid for the property or what it would cost to buy. This includes the house price but not closing costs or renovation expenses. This number is your baseline for measuring returns.
Monthly Rent Income
This is what tenants pay you each month. Look at similar properties in your area to see a clear number. Don't guess high here; overestimating rent is one of the biggest mistakes new landlords make.
Annual Property Tax
Your local government sends you this bill once or twice per year. The amount varies widely by location. Some areas charge 1% of home value while others charge 3% or more. Check your tax assessment or ask the current owner for the exact amount.
Monthly Insurance
Landlord insurance costs more than regular homeowner's insurance because it covers rental risks. Get quotes from several companies. This typically runs $100-$300 per month depending on property value and location.
Monthly HOA Fees
If the property is in a homeowners association, you'll pay monthly or yearly fees. Condos and townhomes almost always have these. Single-family homes in planned communities might too. Enter zero if there's no HOA.
Maintenance and Repair Percentage
Set aside money for fixing things that break. Most experts recommend 5-15% of your monthly rent. Older properties need closer to 15%. Newer properties might only need 5%. This covers everything from plumbing leaks to appliance replacements.
Vacancy Rate
No property stays rented 100% of the time. When tenants move out, you need time to clean, repair, and find new renters. A 5% vacancy rate means you lose about two weeks of rent per year. Some markets have higher turnover and need 10% or more.
Reading Your Results Rental Yield Calculator
Net Rental Yield
This is your real return after all expenses. It shows what percentage of your property value you earn in profit each year. A 7% net yield on a $300,000 property means you pocket $21,000 annually. This is the number that matters most.
Gross Yield
This simpler calculation just divides annual rent by property price. It ignores all your costs. Some sellers use gross yield to make properties look better than they are. Always focus on net yield for honest comparisons.
Annual Cash Flow
This is your total yearly profit in actual dollars. Positive cash flow means you're making money. Negative means you're losing money every year. Some investors accept small negative cash flow if they expect property values to rise significantly.
Monthly Cash Flow
Your annual cash flow divided by 12. This tells you how much extra money hits your bank account each month after paying all bills. If this number is negative, you need to cover the shortage from other income.
Income Breakdown Chart
The doughnut chart shows where your rent money goes. Light gray represents fixed costs like taxes and insurance. Medium gray shows variable expenses like maintenance and vacancy reserves. Blue is your actual profit. This visual quickly shows if expenses are eating too much of your income.
How to Make the Right Decisions
Compare your net yield to other investment options. If stocks average 10% returns and your rental only yields 4%, you might do better by investing elsewhere. However, real estate offers benefits stocks don't—like tax deductions and property value growth.
Location matters more than the building itself. A cheap property with high yield might sit in a declining neighborhood where values are dropping. Sometimes a lower yield in a growing area makes more financial sense long-term.
Run different scenarios before buying. Try increasing maintenance costs to 15% and vacancy to 10%. If the numbers still work under worse conditions, you've found a safer investment. Properties that only work with perfect conditions often disappoint.
Common Mistakes to Avoid
Don't forget property management fees if you're hiring someone. These typically cost 8-10% of monthly rent and should go in your calculations.
New investors often skip the vacancy budget, thinking they'll always keep tenants. Even great landlords have empty periods. Always include this cost.
Remember that your mortgage payment isn't included in these yield calculations. This tool shows return on the full property price. If you're using a loan, your actual cash-on-cash return will be different.
Conclusion
This calculator cuts through real estate hype with honest numbers. Before you buy any rental property, run the calculations to see if it actually makes financial sense. A property might look profitable until you add up every single expense. Use this calculator to avoid costly mistakes and find rentals that genuinely build your wealth.