Calculate gross and net rental yield for investment properties. Compare yield across multiple properties.
How to Use This Calculator
Enter the property price, monthly rent, vacancy rate, annual expenses, and closing costs. Results appear immediately. Adjust any input to compare scenarios side by side — gross yield, net yield, annual NOI, and price-to-rent ratio update in real time.
Formula & Background
Gross Yield = Annual Rent ÷ Property Price × 100%. Net Yield = (Annual Rent − Annual Expenses) ÷ (Property Price + Closing Costs) × 100%. Price-to-Rent Ratio = Property Price ÷ Annual Rent — values below 15 favor buying; above 20 favor renting.
Calculation Example
Property price $300,000, monthly rent $2,000, 5% vacancy, $5,000 annual expenses, $9,000 closing costs:
Gross Yield = $24,000 / $300,000 = 8.0%. Effective rent = $22,800. NOI = $17,800. Net Yield = $17,800 / $309,000 = 5.76%. Price-to-rent ratio = 12.5x.
Expert Tips
- Budget 1–2% of property value annually for maintenance — skipping this overstates net yield.
- Gross yield above 8% is generally strong in U.S. markets; net yield above 5% is a healthy benchmark.
- If net yield is lower than your mortgage rate, leverage works against you — you are borrowing at a loss.
- The 1% rule (monthly rent ≥ 1% of purchase price) is a quick screening check, not a substitute for full expense analysis.
For a complete investment picture, pair this with the Rental Cash Flow Calculator, which factors in financing costs. The Cap Rate Calculator gives a financing-neutral view of property income potential.
Frequently Asked Questions
What expenses should I include?
Property taxes, insurance, maintenance (budget 1–2% of property value annually), property management fees (8–10% of rent), HOA fees, vacancy loss, and recurring repairs. Omitting any of these inflates your net yield figure.
What is the 1% rule?
The 1% rule says monthly rent should equal at least 1% of the purchase price. For a $200,000 property, target $2,000/month rent. It is a quick screening filter, not a substitute for running full expense calculations.
What is a good rental yield?
In the U.S., 5–8% gross yield is considered solid. Net yield above 4–5% is a reasonable benchmark after all operating expenses. High-appreciation markets (major metros) often yield less because investors accept lower income in exchange for capital growth.
What is price-to-rent ratio?
P/R ratio = Property Price ÷ Annual Rent. Below 15 generally favors buying; above 20 often favors renting. High P/R markets like San Francisco (40–50x) make rental income investing difficult on yield alone.
Should I use gross or net yield for decisions?
Always base investment decisions on net yield — it shows what you actually earn after operating costs. Gross yield is useful for quick cross-market comparisons but significantly overstates returns for high-expense properties.