Rental Yield Calculator
Calculate gross and net rental yield for investment properties using rent, expenses, and property price.
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Rental Yield Calculator – Complete Guide to Gross & Net Rental Yield
Rental yield is one of the most important metrics in real estate investing. It measures how much annual rental income a property generates relative to its purchase price and helps investors evaluate whether a property is worth buying purely from an income perspective. Whether you are a first-time buyer, a seasoned landlord, an NRI investor, or a real estate analyst, understanding rental yield is essential for making informed property investment decisions.
This Rental Yield Calculator allows you to instantly calculate both gross rental yield and net rental yield using monthly rent, property price, and optional annual expenses. The tool works globally and can be used for residential apartments, houses, commercial offices, retail spaces, or any income-generating real estate.
What Is Rental Yield?
Rental yield is the percentage return you earn every year from renting out a property, based on its market value or purchase price. It focuses only on rental income and does not include capital appreciation. This makes rental yield especially useful for investors who prioritize regular cash flow over long-term price growth.
A higher rental yield generally indicates better income efficiency, while a lower yield may suggest that the property is expensive relative to the rent it can generate. Rental yield is commonly used to compare properties across cities, neighborhoods, property types, and even countries.
Gross Rental Yield Explained
Gross rental yield is the simplest form of yield calculation. It measures annual rental income before deducting any expenses such as maintenance, property tax, insurance, repairs, or management fees. Gross yield is useful for quick comparisons when analyzing multiple properties.
Gross Rental Yield Formula:
Gross Rental Yield (%) = (Monthly Rent × 12 ÷ Property Price) × 100
Example:
Monthly Rent = 15,000
Property Price = 5,000,000
- Annual Rent = 15,000 × 12 = 180,000
- Gross Yield = (180,000 ÷ 5,000,000) × 100 = 3.6%
This means the property generates a gross return of 3.6% per year before expenses.
Net Rental Yield Explained
Net rental yield provides a more realistic picture of profitability by accounting for ongoing expenses. These may include maintenance charges, property tax, insurance, repairs, vacancy losses, and property management fees. Net yield shows how much income you actually retain after costs.
Net Rental Yield Formula:
Net Rental Yield (%) = ((Annual Rent − Annual Expenses) ÷ Property Price) × 100
Example:
Annual Rent = 180,000
Annual Expenses = 30,000
Property Price = 5,000,000
- Net Income = 180,000 − 30,000 = 150,000
- Net Yield = (150,000 ÷ 5,000,000) × 100 = 3.0%
Net yield is the preferred metric for long-term investors because it reflects real cash flow rather than headline returns.
What Is a Good Rental Yield?
A “good” rental yield varies by country, city, and property type. In general:
- Residential properties often yield 2%–6%
- Commercial properties may yield 6%–12%
- High-yield markets may offer higher returns but carry higher risk
Higher yields are commonly found in emerging markets or smaller cities, while lower yields are typical in premium urban locations with strong capital appreciation potential. Investors should balance yield with factors such as tenant demand, vacancy risk, legal environment, and long-term growth.
Rental Yield vs Capital Appreciation
Rental yield focuses on income, while capital appreciation measures how much a property’s value increases over time. Some markets offer low rental yields but strong price growth, while others offer high rental income but slower appreciation. Smart investors consider both metrics together rather than in isolation.
Who Should Use This Rental Yield Calculator?
- Real estate investors comparing properties
- Landlords evaluating existing rental performance
- NRIs investing in overseas or domestic property
- Real estate agents advising clients
- Students learning property investment fundamentals
Accuracy, Privacy, and Limitations
All calculations are performed instantly in your browser. No data is stored, transmitted, or tracked. While this calculator provides mathematically accurate rental yield calculations, actual investment performance may vary due to vacancies, rent changes, financing costs, taxes, and market conditions.
This Rental Yield Calculator is designed to simplify real estate analysis and help you make confident, data-driven property investment decisions. Use it alongside other metrics such as ROI, cash flow, and price appreciation to build a complete picture of property performance.
Frequently Asked Questions
What is a good rental yield?
Residential property yields typically range between 2%–6%, while commercial properties may offer 6%–12%.
Does rental yield include tax?
Gross yield does not include expenses. Net yield subtracts expenses like tax, maintenance, insurance, or repairs.
Does this tool store my data?
No. All calculations run locally.