Rental Yield Calculator

Rental yield is the annual rent from a property as a percentage of its value. Gross yield uses the full rent, while net yield subtracts running costs first to show the return after expenses.

Divide the annual rent by the property value and multiply by 100. For example, 20,000 of yearly rent on a 250,000 property is an 8 percent gross yield.

Subtract yearly expenses from the annual rent, divide by the property value and multiply by 100. On a 250,000 property, 20,000 of rent minus 5,000 of costs is a 6 percent net yield.

Include recurring running costs such as property tax, insurance, maintenance, management fees, service charges and an allowance for vacancy. Mortgage payments and income tax are usually left out.

It varies by market, but many investors look for a gross yield of 5 to 8 percent. A higher yield means more income per dollar of value, though it can also reflect higher risk or a cheaper area.