Rental Yield Calculator
Estimate gross rental yield, effective rental income, operating expenses, net operating income and net rental yield before financing.
Rental property snapshot
Results are estimates for informational purposes only. Verify important financial, tax, real-estate or retirement decisions with a qualified professional.
How rental yield is calculated
Gross yield compares scheduled annual rent with the purchase price. Net yield goes further by reducing rent for vacancy and subtracting property taxes, insurance, HOA, maintenance, management and other operating expenses. The resulting net operating income is divided by purchase price plus acquisition costs.
Mortgage principal and interest are not operating expenses in this calculation. Excluding financing makes it easier to compare the underlying economics of two properties before deciding how to fund them.
How to interpret the yield
A higher yield is not automatically a better investment. Property condition, neighborhood, tenant risk, future capital expenditures, taxes and appreciation prospects can materially change the outcome.
Frequently asked questions
What is gross rental yield?
Gross yield is annual scheduled rent divided by the property purchase price. It ignores vacancy and operating expenses.
What is net rental yield?
This calculator defines net rental yield as estimated net operating income divided by purchase price plus closing costs.
Does net operating income include the mortgage?
No. NOI is calculated before financing costs so properties can be compared independent of how they are financed.
Why include vacancy?
A property may not be occupied and paying rent every month. A vacancy allowance provides a more conservative income estimate.
Is this the same as cash-on-cash return?
No. Cash-on-cash return incorporates financing and the cash actually invested. Use CalcBunny’s Cash-on-Cash Return Calculator for that analysis.