How it works
Gross rental yield is a quick income-to-value measure. It does not deduct operating expenses, borrowing costs or taxes, so it must not be read as profit.
The formula
Keep currency, units and time periods consistent. Percentage inputs use percentage points (enter 5 for 5%). Results are rounded only for display; tiny nonzero values may use scientific notation. Undefined ratios are shown as unavailable.
$24,000 annual rent on a $250,000 property gives 9.60% gross yield. With $6,000 operating expenses and no vacancy loss, net income is $18,000 and net yield is 7.20%.
Calculation method
The optional net calculation includes entered other income, vacancy and operating costs. If no operating-expense amount is supplied, net yield stays unavailable rather than silently assuming a complete expense budget.
Interpretation
Gross and net yield answer different questions. Their gap reflects only the expenses and income adjustments you enter. Mortgage debt service is excluded from both property-level measures.
Limitations
All rents, values, vacancy, expenses and financing terms are your assumptions. Figures exclude income tax and appreciation. Inputs stay in your browser. These calculations do not predict loan approval or investment outcomes.
Method and reference sources
Method and content checked 2026-09-20. These sources provide background, not endorsement or professional certification. The formula and limitations above define this calculator.
- CFPB — How lenders calculate mortgage paymentsLoan principal-and-interest context; property operating expenses and underwriting assumptions are separate.
Frequently asked questions
Why can gross rental yield overstate the cash return?
Gross yield compares rent with property value before vacancies, operating expenses and financing. Net yield and cash flow address different cost layers.
What is a worked example for Rental Yield?
$24,000 annual rent on a $250,000 property gives 9.60% gross yield. With $6,000 operating expenses and no vacancy loss, net income is $18,000 and net yield is 7.20%.