Rental Yield Calculator
Calculate the gross and net rental yield of an investment property. Free online rental yield calculator for landlords and investors.
Currency
₹
₹
₹
Maintenance, property tax, insurance, and other annual costs.
mo/yr
Gross Yield = (Annual Rent / Price) × 100
Net Yield = (Annual Rent − Expenses) / Price × 100
54.00%
Net Rental Yield
Gross Annual Rent
₹300,000.00
Gross Yield
60.00%
Net Annual Rent
₹270,000.00
Annual Operating Expenses
₹30,000.00
Net Yield
54.00%
Cap rate comparison: the gross yield behaves like a simplified cap rate — it ignores vacancy, operating costs, and purchase costs. The net yield subtracts those costs, making it the fairer figure to compare against other local property yields or the risk-free rate.
How Does the Rental Yield Calculator Work?
The calculator multiplies your monthly rent by the months rented per year to get gross annual rent, then divides by the property purchase price and multiplies by 100 for the gross yield. Subtracting annual operating expenses (maintenance, tax, insurance) from gross annual rent gives the net annual rent, and the same division yields the net yield. The net figure is the one investors compare, because it reflects the real cash a property produces after its running costs.
Example
A property bought for $500,000 that rents for $2,500 a month for 12 months produces $30,000 in gross annual rent, a gross yield of 6%. With $6,000 in annual operating expenses, net annual rent drops to $24,000 and net yield to 4.8%. That 1.2 percentage point gap is the real cost of owning and maintaining the property.
Common Use Cases
- Screening rental properties before a purchase using a quick yield estimate.
- Comparing several properties with different prices and rents on the same basis.
- Stress-testing a property by modelling vacancies or higher maintenance costs.
- Benchmarking a property against bank fixed deposits or other investments.
FAQs
What is a good rental yield?
A healthy net yield is usually 3-5% in metro markets, while better returns are typically found in smaller cities and high-rent commercial pockets. Anything that beats the local risk-free rate after costs is reasonable, and location usually matters more than the exact number.
How is yield different from cap rate?
Gross yield treats the purchase price as the investment and ignores costs, similar to a simplified cap rate. A true cap rate divides net operating income by value, which matches the net yield here when the property is bought at market value without heavy transaction costs.
Should I leave vacancy out of the calculation?
The default of 12 rented months assumes full occupancy. If you expect any vacancy, reduce the months rented or bump up operating expenses, because an empty month has rent of zero but still carries tax and maintenance.