Calculate gross and net rental yield for investment properties. Gross yield uses annual rent divided by price; net yield subtracts operating expenses.
Rental yield measures the income return on a property investment as a percentage of its price. Gross rental yield is the simplest version: annual rent divided by the property price, expressed as a percentage. Net rental yield goes further by subtracting operating expenses from the annual rent before dividing.
For buy-to-let investors, rental yield is the primary screening metric. It tells you at a glance whether a property can generate adequate income relative to its cost. Gross yield provides a quick comparison across listings, while net yield gives a more realistic picture of actual returns after accounting for the costs of ownership.
This calculator computes both gross and net yield simultaneously, letting you see the full picture. You enter the property price, annual rent, and annual expenses, and instantly see both yield figures side by side along with key support metrics.
Homebuyers, investors, and real-estate professionals all benefit from precise rental yield figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.
Rental yield is the quickest way to assess whether a property makes financial sense as an investment. Gross yield takes seconds to calculate from any listing, giving you an instant filter. Net yield provides the realistic return after all costs, helping you compare properties fairly and set rental rates that meet your return targets.
Gross Rental Yield = (Annual Rent / Property Price) × 100 Net Rental Yield = ((Annual Rent − Annual Expenses) / Property Price) × 100
Result: Gross Yield = 9.60% | Net Yield = 6.40%
Annual rent of $24,000 on a $250,000 property produces a gross yield of 9.60%. After $8,000 in annual expenses (taxes, insurance, management, repairs), net income is $16,000, giving a net yield of 6.40%. The 3.2 percentage point difference highlights the importance of calculating net yield.
Gross yield is useful for quick screening and cross-market comparisons because it eliminates expense variability. However, it can be misleading — a property with high rents but crushing tax bills, high insurance, and constant repairs may have a great gross yield but terrible net yield. Always calculate both and pay attention to the spread between them.
Yields compress (decrease) when property prices rise faster than rents, typically during economic expansions and low-interest-rate environments. Yields expand when prices fall or stagnate while rents hold steady, often during periods of market correction. Understanding where your market sits in this cycle informs timing decisions.
Establish a minimum net yield threshold before screening properties. Many investors require at least 5–6% net yield for single-family and 6–8% for multifamily. Your threshold should exceed your cost of capital (mortgage rate or opportunity cost) by at least 1–2 percentage points to justify the effort and risk of real estate ownership.
It depends on the market and property type. Generally, gross yields above 7% and net yields above 5% are considered good for residential properties. In premium urban areas, yields are lower (3–5% gross) while secondary markets can offer 8–12% gross. Always compare to local benchmarks.
They're very similar. Net rental yield and cap rate both measure income return after expenses relative to property value. The main difference is terminology and context — cap rate is used primarily in commercial real estate, while rental yield is more common in residential buy-to-let markets.
Use purchase price to measure yield on your original investment. Use current market value to assess yield on your current equity position and compare to alternative investments. Both perspectives matter for different decisions.
No. Rental yield measures the property's income performance independent of financing. Mortgage payments are a financing cost, not an operating expense. Use cash-on-cash return to measure yield on your actual cash investment after debt service.
You can increase yield by raising rents (market analysis, property improvements), reducing expenses (competitive insurance quotes, efficient management), or buying below market value. Each 1% improvement in yield compounds significantly over a long hold period.
This usually happens when different expense assumptions are used. Net yield might include all expenses while cap rate calculations might exclude certain items. Ensure you're using consistent expense definitions when comparing metrics across different analyses or properties.