Rental Yield Calculator
Gross, net and vacancy-adjusted rental yield, the income after costs and the payback period.
Results
What this tool does
Yield is what lets properties of wildly different prices be compared on the same scale, but only the net figure is worth comparing. Note that yield says nothing about capital growth, which is often where the return on residential property actually comes from — and nothing about the risk of it going the other way.
Formula
gross yield = annual lease payment ÷ price × 100
Variables
| Symbol | Meaning | Unit |
|---|---|---|
pc | Purchase price | — |
rm | Monthly rent | — |
cs | Annual running costs | — |
vc | Vacancy allowance | % |
GY | Gross yield | % |
NY | Net yield | % |
RY | Net yield | % |
NI | Annual income | — |
PB | Years | — |
Worked example
- Purchase price250,000
- Monthly rent900
- Annual running costs2200
- Vacancy allowance5 %
- Gross yield4.3200 %
- Net yield3.4400 %
- Net yield3.2240 %
- Annual income8060.00
- Years31.0
Limitations
- This is an informational calculator, not personalised financial advice. Rates, fees, taxes and contract conditions vary between institutions and countries.
- Tax rates and rounding rules differ between countries and sometimes between regions. Use the rate that applies to your invoice.
- The result is an estimate based only on the values you type. Real situations often include factors this calculator does not know about.
- The tool works with whatever currency you use for the inputs; it does not convert between currencies.
Frequently asked questions
Why is the gross yield almost useless?
Because it is the only figure most listings quote and the only one that ignores everything that actually happens: management, insurance, maintenance, service charges, property tax, void periods between tenants, and the cost of the money if the purchase is financed. Those routinely take a fifth to a third of the rent. The third result here adds a vacancy allowance on top of the costs, and is the closest of the three to what will land in the bank.