🏠 Rental Yield Calculator
By ToolNimba Finance Team · Reviewed by ToolNimba Editorial Review, property and personal finance content · Updated 2026-06-19
This calculator gives an estimate only and is not financial or investment advice. Rental yield is just one measure of a property investment, it ignores mortgage interest, void periods, capital growth, taxes specific to your situation and the cost of selling. Local rules, lettings demand and your financing all change the real return. Confirm figures with the actual rent, a full schedule of costs and a qualified adviser before you buy.
Enter the property price and monthly rent to see the gross yield. Add annual running costs for the net yield.
Rental yield tells you what annual income a property produces as a percentage of its price, which is the quickest way to compare one buy-to-let against another. Enter the property price, the monthly rent and your annual running costs, and this calculator shows both the gross yield (rent against price) and the net yield (rent after costs against price). Use it to sanity-check a listing, compare two areas, or judge whether the rent justifies the asking price before you commit.
What is the Rental Yield Calculator?
Rental yield is the annual rent expressed as a percentage of the property price, and it is the standard yardstick investors use to compare income from very different properties. Gross yield is the simple version: annual rent divided by the purchase price, times 100. A $300,000 flat let at $1,800 a month earns $21,600 a year, so the gross yield is 21,600 ÷ 300,000 × 100 = 7.2%. It is easy to work out and useful for a first pass, but it flatters every property because it ignores the cost of actually running the let.
Net yield is the figure that matters once you are serious. It deducts the annual running costs (letting agent fees, insurance, repairs and maintenance, ground rent or service charges, property taxes and an allowance for empty months) from the rent before dividing by the price. On the same flat, if those costs come to $4,000 a year, the net yield is (21,600 − 4,000) ÷ 300,000 × 100 = 5.87%. The gap between gross and net is the true cost of ownership, and it is often a quarter to a third of the gross figure, so a property that looks attractive on gross can be mediocre on net.
Yield is not the whole story. It measures income, not total return, so it says nothing about capital growth (whether the property itself rises in value), and it does not account for mortgage interest, which can swallow much of the rent on a leveraged purchase. High-yield areas frequently see slower price growth, while prime locations show low yields but stronger appreciation. Treat yield as one lens: pair it with a view on growth, financing costs and how stable the local rental demand is before deciding.
When to use it
- Comparing the rental return of two or more properties in different areas on a like-for-like basis.
- Checking whether the asking rent justifies a listing price before you make an offer.
- Working out the net yield after agent fees, insurance, repairs and taxes, not just the headline gross figure.
- Setting a target rent when you know the purchase price and the minimum yield you need.
How to use the Rental Yield Calculator
- Enter the property price (the purchase price or current market value).
- Enter the expected monthly rent.
- Enter your total annual running costs (leave blank or zero to see gross yield only).
- Read off the gross yield, the net yield and the annual rent, all updated instantly.
Formula & method
Worked examples
A property priced at $300,000, rented for $1,800 a month, with $4,000 of annual running costs.
- Annual rent = 1,800 × 12 = $21,600
- Gross yield = 21,600 ÷ 300,000 × 100 = 7.20%
- Rent after costs = 21,600 − 4,000 = $17,600
- Net yield = 17,600 ÷ 300,000 × 100 = 5.87%
Result: Gross yield 7.20%, net yield 5.87%, annual rent $21,600
A property priced at $250,000, rented for $1,500 a month, with $5,500 of annual running costs.
- Annual rent = 1,500 × 12 = $18,000
- Gross yield = 18,000 ÷ 250,000 × 100 = 7.20%
- Rent after costs = 18,000 − 5,500 = $12,500
- Net yield = 12,500 ÷ 250,000 × 100 = 5.00%
Result: Gross yield 7.20%, net yield 5.00%, annual rent $18,000
Gross rental yield for different price and monthly rent combinations
| Property price | Monthly rent | Annual rent | Gross yield |
|---|---|---|---|
| $150,000 | $1,200 | $14,400 | 9.60% |
| $200,000 | $1,000 | $12,000 | 6.00% |
| $300,000 | $1,500 | $18,000 | 6.00% |
| $300,000 | $2,000 | $24,000 | 8.00% |
| $400,000 | $2,000 | $24,000 | 6.00% |
Rough guide to gross rental yields (varies widely by market)
| Gross yield | What it often signals |
|---|---|
| Below 4% | Prime or high-growth area, income is thin, you are betting on capital appreciation |
| 4% to 6% | Typical for many established residential markets |
| 6% to 8% | Solid income, common in mid-tier or regional markets |
| Above 8% | High income, often comes with higher risk, voids or slower price growth |
Common mistakes to avoid
- Judging a property on gross yield alone. Gross yield ignores every cost of ownership. Agent fees, insurance, repairs, service charges, taxes and empty months can cut the real return by a quarter to a third. Always work out the net yield before comparing properties.
- Forgetting void periods. The rent is rarely collected for all 12 months. A few weeks empty between tenants lowers your actual income, so build a realistic vacancy allowance into your annual costs.
- Confusing yield with total return. Yield only measures rental income against price. It says nothing about whether the property is rising or falling in value, which can dominate your overall return over time.
- Ignoring mortgage interest on a financed purchase. If you borrow to buy, interest is a major cost that yield on the full price does not capture. A property with a healthy gross yield can still lose money once a loan is in place.
Glossary
- Gross rental yield
- Annual rent as a percentage of the property price, before deducting any running costs.
- Net rental yield
- Annual rent minus annual running costs, expressed as a percentage of the property price.
- Annual rent
- The monthly rent multiplied by 12, the total rent collected in a year if fully let.
- Void period
- A stretch of time when the property is empty and earning no rent, between tenancies.
- Capital growth
- The increase in the property value itself over time, separate from rental income.
Frequently asked questions
What is a good rental yield?
It depends heavily on the market, but many investors look for a gross yield of around 5% to 8%. Below 4% usually means you are relying on capital growth rather than income, while yields above 8% often come with higher risk or slower price appreciation. Compare against typical yields in the same area.
What is the difference between gross and net rental yield?
Gross yield is the annual rent divided by the property price, with no costs deducted. Net yield subtracts your annual running costs (agent fees, insurance, repairs, taxes, voids) from the rent first, so it reflects the real return. Net yield is always lower and is the more honest figure.
How do I calculate rental yield?
Multiply the monthly rent by 12 to get the annual rent, divide it by the property price, then multiply by 100 for the gross yield. For net yield, deduct your annual costs from the rent before dividing. This calculator does both as soon as you enter the numbers.
Should I use the purchase price or current value?
Use the purchase price to judge the return on what you actually paid, or the current market value to see the yield on what the property is worth today. Comparing properties is fairest when you use the same basis for each one.
Does rental yield include mortgage payments?
No. Standard rental yield is calculated against the full property price and ignores how you financed it. If you have a mortgage, the interest is a real cost that yield does not show, so factor it in separately when judging whether the property makes money.
What costs should I include in net yield?
Include letting or management fees, building and landlord insurance, repairs and maintenance, ground rent or service charges, property taxes, and an allowance for void periods. These are the recurring annual costs that reduce your real return below the gross figure.
Sources
- Rental Yield , Investopedia
- Investing in rental properties , U.S. Consumer Financial Protection Bureau