Rental & Investment · Formula v1.0.0
Rental Yield Calculator
Compare gross and net rental yield side by side, with the formulas and expense treatment explained.
Net rental yield
6.06%
Gross yield: 7.54%
- Gross annual rental incomeMonthly rent × 12
- $26,400
- Gross rental yieldGross income ÷ property value × 100
- 7.54%
- Annual operating expenses
- $5,200
- Other annual costs
- $0
- Net operating income (NOI)Gross income − all operating costs
- $21,200
- Net rental yieldNOI ÷ property value × 100
- 6.06%
Rental yield expresses annual rent as a percentage of what the property costs. It is the fastest way to compare income potential across properties or cities.
Gross yield uses rent alone, so it flatters properties with high costs. Net yield subtracts operating expenses first and is the more honest comparison, though it still ignores financing.
A property can look attractive on gross yield and mediocre on net yield once taxes, insurance, management, and maintenance are included, always compare both.
Gross Yield = (Annual Rent ÷ Property Value) × 100 · Net Yield = (NOI ÷ Property Value) × 100
Annual rent: Monthly rent × 12, before any costs.
NOI: Net operating income: rent minus operating expenses, before debt service.
A $350,000 property rents for $2,200/month: gross annual income is $26,400, so gross yield = 7.54%.
Operating expenses of $5,200 + $0 other costs leave NOI of $21,200, so net yield = 6.06%.
The 1.5-point gap between gross and net is exactly why both numbers should be checked before comparing properties.
- •No vacancy, financing, tax, or capital-expenditure modeling.
- •Assumes the entered rent is achievable for a full year.
Formula reference
Gross Yield = (Annual Rent ÷ Property Value) × 100 · Net Yield = (NOI ÷ Property Value) × 100
- Annual rent, Monthly rent × 12, before any costs.
- NOI, Net operating income: rent minus operating expenses, before debt service.