# Rental Yield Calculator (Gross & Net) Calculate gross and net rental yield from purchase price, rent, vacancy, and operating expenses to see real return, not just the headline number. --- - **Canonical URL:** https://dothecalculation.com/calculators/rental-yield-calculator - **Category:** Real Estate & Property - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology --- ## Rental Yield Calculator (Gross & Net) Calculate both gross rental yield (a fast screening number) and net rental yield (what the property actually returns after real expenses) from purchase price, rent, vacancy, and operating costs — so you can see how far apart the two numbers really are. - Gross yield for fast property-to-property comparison - Net yield after vacancy, taxes, insurance, maintenance, and management - See exactly how much expenses erode the headline yield number ## Quick Answer — Gross Yield vs Net Yield **Gross yield** = Annual rent ÷ Purchase price × 100. It's the number you'll see quoted most often because it takes ten seconds to calculate, and it's genuinely useful for a first-pass comparison across many listings. **Net yield** = (Annual rent − Vacancy loss − All operating expenses) ÷ Purchase price × 100. This is the number that actually reflects what the property returns, and it is reliably lower than gross yield — often meaningfully so. **Quick reference:** a $300,000 property renting for $2,000/month has a gross yield of exactly **8%**. Once you subtract a realistic 5% vacancy allowance, property tax, insurance, maintenance, and an 8% management fee, the net yield on that same property drops to about **4.79%** — a gap of over 3 percentage points, entirely from costs the gross figure ignores. US residential rental yields typically run **4-8% gross** depending on market, with net yield running 30-50% below the gross figure once realistic expenses are applied. If a listing only advertises gross yield, treat it as a screening number, not a return estimate. ## How to Use This Calculator Enter the property's purchase price, monthly rent, expected vacancy rate, and your annual expenses: property tax, insurance, maintenance/repairs, HOA fees if applicable, and property management fee as a percentage of collected rent. **Worked example:** $300,000 purchase price, $2,000/month rent, 5% vacancy, $3,600/year property tax, $1,200/year insurance, $1,800/year maintenance, no HOA, 8% management fee. Gross annual rent = $2,000 × 12 = **$24,000**. Gross yield = $24,000 ÷ $300,000 = **8.00%**. Vacancy loss = $24,000 × 5% = **$1,200**, so effective rent = **$22,800**. Management fee = $22,800 × 8% = **$1,824**. Total expenses = $3,600 + $1,200 + $1,800 + $1,824 = **$8,424**. Net annual income = $22,800 − $8,424 = **$14,376**. Net yield = $14,376 ÷ $300,000 = **4.79%**. **A second example, self-managed with no vacancy modeled:** $500,000 purchase price, $4,166.67/month rent, 0% vacancy, no expenses entered (all self-managed, expenses tracked separately). Gross annual rent = **$50,000**. Gross yield = **10.00%**. With no expenses subtracted, net yield equals gross yield here — this is intentionally the calculator's default behavior with zeroed expense fields, and it illustrates exactly why gross yield alone overstates return: it's mathematically identical to a scenario with zero operating costs, which no real rental property has. For the income figure itself broken all the way down by expense category — the input this calculator's net yield is built from — use the [Net Operating Income calculator](/calculators/net-operating-income-calculator). For a full worked example connecting yield, cap rate, and cash-on-cash return in one real underwrite, see the [Airbnb ROI guide](/blog/property/airbnb-roi-guide). ## The Formula This Calculator Uses **Gross Annual Rent** = Monthly rent × 12. **Gross Yield %** = Gross Annual Rent ÷ Purchase Price × 100. **Vacancy Loss** = Gross Annual Rent × Vacancy rate %. **Effective Rent** = Gross Annual Rent − Vacancy Loss. **Management Fee** = Effective Rent × Management fee %. **Total Expenses** = Property tax + Insurance + Maintenance + HOA + Management fee. **Net Annual Income** = Effective Rent − Total Expenses. **Net Yield %** = Net Annual Income ÷ Purchase Price × 100. ## Why Gross Yield Is a Screening Tool, Not a Return Gross yield's entire appeal is speed — it lets you rank fifty listings in a spreadsheet without knowing anything about their operating costs. That's genuinely valuable for a first pass. But it treats a low-maintenance new-build condo with no property tax surprises the same as an aging single-family home with a high tax bill, expensive insurance, and deferred maintenance, simply because they happen to rent for the same amount relative to price. Two properties with identical 8% gross yields can have net yields that differ by several percentage points once real expenses are applied, because property tax rates, insurance costs, HOA fees, and maintenance burden vary enormously by property age, type, and location — none of which gross yield sees at all. The practical rule: use gross yield to build a shortlist, then run every shortlisted property through the net yield calculation (or the full [NOI calculator](/calculators/net-operating-income-calculator)) before comparing them seriously. ## Rental Yield vs Cap Rate — Related but Not the Same Metric Rental yield and cap rate are close cousins and it's easy to conflate them. **Rental yield** (this calculator) relates rental income to **purchase price** — what you paid. **Cap rate** relates NOI to **current market value** — what the property is worth today. For a property you just bought at fair market value, the two are close to identical; for a property you bought below market or that has appreciated significantly since purchase, they diverge. Cap rate is the standard metric for comparing investment properties against each other and against a market's typical rate of return, which is why commercial and larger residential investors lean on it more than yield. If that's the comparison you need, the [cap rate & valuation calculator](/calculators/cap-rate-market-calculator) uses current value rather than purchase price. Rental yield remains the more intuitive number for a buyer asking the simpler question: 'relative to what I'm paying, how much does this property generate?' For screening deals by price-to-rent ratio without a full expense workup at all, the [Gross Rent Multiplier calculator](/calculators/gross-rent-multiplier-calculator) is the fastest first-pass tool on this site — even quicker than gross yield, though it tells you even less about actual return. ## What This Calculator Doesn't Account For This is a purchase-price-based yield calculation, which means it doesn't account for financing at all — cash-on-cash return, which factors in your actual down payment and mortgage costs, is a different and often more meaningful number for a leveraged buyer. Use the [rental property ROI calculator](/calculators/rental-property-roi-calculator) for that, or the [property cash flow calculator](/calculators/property-cash-flow-calculator) for a monthly cash flow and DSCR view once you already have a mortgage payment quoted. It also assumes a standard long-term lease. If you're evaluating the property as a short-term or vacation rental instead, rent income doesn't work the same way — use the [short-term rental revenue calculator](/calculators/short-term-rental-revenue-calculator) to build a realistic gross revenue figure from nightly rate and occupancy first, then substitute that for the annual rent figure here. It also uses a single steady-state year, not a multi-year hold — rent growth, expense inflation, and appreciation all change the picture over a 5-10 year investment horizon, and this calculator intentionally doesn't project those forward. Finally, closing costs, renovation costs at acquisition, and any capital expenditure reserve are excluded from the purchase price denominator here. For a full pre-purchase underwrite that includes acquisition costs, treat this as one input into a broader analysis rather than the complete picture. ## Frequently asked questions ### What's a good rental yield? US residential gross yields typically run 4-8% depending on market, with net yield running meaningfully lower after real expenses. What counts as 'good' depends heavily on your market, financing, and risk tolerance — there's no universal benchmark that applies everywhere. ### Why is net yield so much lower than gross yield? Because gross yield ignores vacancy loss and every operating expense — property tax, insurance, maintenance, and management fees typically consume 35-50% of effective rental income, and that gap shows up entirely in the difference between gross and net yield. ### Is rental yield the same as cap rate? They're related but not identical. Rental yield uses purchase price as the denominator; cap rate uses current market value. For a property bought at fair market value they're close; for one bought below market or that has appreciated since purchase, they diverge. ### Does this calculator include mortgage payments? No. This is a purchase-price-based yield calculation independent of financing. For a return figure that accounts for your actual down payment and mortgage, use the rental property ROI calculator for cash-on-cash return instead. ### Should I use gross or net yield to compare properties? Use gross yield to quickly shortlist candidates, then always compare finalists on net yield — two properties with identical gross yield can have very different net yields once real operating expenses are applied. ### What vacancy rate should I use? If you don't have a reliable local figure, the 2026 US national rental vacancy rate of about 7.3% is a more realistic default than assuming 0%, which systematically overstates net yield. ## Related concepts - **Gross yield** — Annual rental income divided by purchase price — a fast screening metric that ignores vacancy and operating expenses entirely. - **Net yield** — Annual rental income after vacancy loss and all operating expenses, divided by purchase price — a more accurate reflection of actual return. - **Cap rate** — Net Operating Income divided by current market value (not purchase price) — the related metric more commonly used for larger or commercial property comparisons. ## Related guides - [Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return](https://dothecalculation.com/blog/property/airbnb-roi-guide) — Underwrite short-term rentals like a professional. Learn how to calculate cap rate, monthly net cash flow, and occupancy-driven returns using actual vacation rental math. ## Related calculators - [Net Operating Income (NOI) Calculator](https://dothecalculation.com/calculators/net-operating-income-calculator) — Calculate a rental property Net Operating Income from gross rent, other income, vacancy loss, and a full operating expense breakdown. - [Gross Rent Multiplier (GRM) Calculator](https://dothecalculation.com/calculators/gross-rent-multiplier-calculator) — Estimate property value and calculate the Gross Rent Multiplier from purchase price and annual rental income for quick investment screening. - [Property Cash Flow Calculator (Monthly)](https://dothecalculation.com/calculators/property-cash-flow-calculator) — Calculate monthly rental property cash flow and DSCR from rent, vacancy, the full operating expense stack, and the mortgage payment. - [Rental Property ROI Calculator](https://dothecalculation.com/calculators/rental-property-roi-calculator) — Calculate rental property ROI with projected monthly cash flow, cap rate, cash-on-cash return, and net operating income for investment properties. - [Airbnb ROI Calculator](https://dothecalculation.com/calculators/airbnb-roi-calculator) — Calculate Airbnb rental ROI, including projected monthly cash flow, cap rate, and cash-on-cash return, to evaluate short-term rental profitability. - [Commercial Cap Rate & Valuation Calculator](https://dothecalculation.com/calculators/cap-rate-market-calculator) — Calculate commercial property capitalization rates and estimate implied property valuation from net operating income for investment analysis. --- _This calculator is for educational and planning purposes. Actual rental returns depend on local market conditions, financing terms, and property-specific factors not captured here. Verify expense assumptions against real bills and consult a real estate professional before making an investment decision._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/rental-yield-calculator). Quote freely with attribution and a link to this page._