Rental Yield Calculator
Check whether a rental property pays its way. Enter the price, buying costs, rent and running costs to see the gross rental yield, the more realistic net rental yield and your net yearly income before any mortgage.
Closing costs, transfer tax / stamp duty, legal, initial repairs
About 2 weeks a year is 4%
Licences, safety checks, accounting
How to use the Rental Yield Calculator
- Enter the property price and the buying costs such as closing costs or stamp duty.
- Enter the rent per month or per week, and a vacancy allowance.
- Add the management fee and yearly running costs.
- Press Calculate yield to see gross and net rental yield and net income.
- Check the table to see how the yield changes if the rent is higher or lower.
Rental yield formulas
- Gross rental yield = yearly rent ÷ property price × 100
- Net rental yield = (yearly rent − vacancy − running costs) ÷ (price + buying costs) × 100
- Yearly rent = monthly rent × 12, or weekly rent × 52
Example: a $300,000 property rented for $1,650 a month earns $19,800 a year, a 6.60% gross yield. After 4% vacancy ($792), a 10% management fee ($1,900.80) and $6,200 of running costs, net income is $10,907.20. Divided by $309,000 total cost, the net yield is 3.53%.
Gross rental yield by price and monthly rent
| Price | $1,000/mo | $1,500/mo | $2,000/mo | $2,500/mo |
|---|---|---|---|---|
| $150,000 | 8.00% | 12.00% | 16.00% | 20.00% |
| $200,000 | 6.00% | 9.00% | 12.00% | 15.00% |
| $300,000 | 4.00% | 6.00% | 8.00% | 10.00% |
| $400,000 | 3.00% | 4.50% | 6.00% | 7.50% |
| $500,000 | 2.40% | 3.60% | 4.80% | 6.00% |
A quick screen many investors use: the "1% rule" asks whether monthly rent is at least 1% of the price (a 12% gross yield). It is a rough filter only and is hard to meet in many markets.
Frequently asked questions
How do you calculate rental yield?
Gross rental yield = yearly rent ÷ property price × 100. Net rental yield = (yearly rent − vacancy − running costs) ÷ (price + buying costs) × 100. For example, $19,800 rent on a $300,000 home is a 6.6% gross yield.
What is the difference between gross and net yield?
Gross yield only uses the rent and price, so it is quick for comparing listings. Net yield subtracts the real costs of owning the property and adds buying costs to the price, so it shows the return you actually keep.
What is a good rental yield?
It depends on the market. Many investors look for gross yields of about 5% to 8%, and net yields after costs are usually a few points lower. High yields often come with higher risk, more maintenance or lower price growth.
Does rental yield include the mortgage?
No. Rental yield measures the property's income against its cost, as if bought with cash. To see the return on your own money after mortgage payments, use cash-on-cash return in the Cap Rate Calculator.
How is rental yield different from cap rate?
They are close. Cap rate divides net operating income by the current value, while net rental yield here divides net income by what you paid including buying costs. Gross yield ignores costs entirely.
What costs should I include for net yield?
Include letting or management fees, maintenance and repairs, landlord insurance, property tax, service charges or HOA, licences and safety checks, and an allowance for empty periods. Do not include mortgage payments or income tax.