Rental Yield & Investment ROI Calculator
Calculate Gross Rental Yield, Net Rental Yield, and net annual cash flow factoring in property purchase price, monthly rent, vacancy rates, and…
Calculation Formula
How to Use the Rental Yield & Investment ROI Calculator
- 1 Enter the Property Purchase Price ($).
- 2 Input expected Monthly Rental Income ($).
- 3 Specify annual operating expenses (Property taxes, insurance, maintenance).
- 4 Set an estimated Vacancy Rate percentage (standard is 5% to 8%).
- 5 Review your Gross Yield, Net Yield, and net annual cash flow.
Methodology & Algorithmic Standards
Gross Rental Yield = (Annual Rent / Purchase Price) * 100. Effective Gross Income = Annual Rent * (1 | Vacancy Rate %). Net Rental Yield = ((Effective Income | Annual Expenses) / Purchase Price) * 100.
Frequently Asked Questions
What is a good gross rental yield benchmark? ▼
A gross rental yield of 5% to 8% is generally considered healthy in residential real estate, while yields above 8% indicate strong cash-flow properties.
What is the key difference between Gross and Net Rental Yield? ▼
Gross Yield only compares top-line rent to purchase price. Net Yield accounts for vacancy loss, local property taxes, HOA fees, and recurring maintenance.
Does this calculate mortgage financing costs? ▼
This tool computes unleveraged asset yield. To calculate monthly principal & interest debt service, use our companion Mortgage & Loan Estimator.
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