Calculate gross and net rental yield for investment properties. Factor in vacancy and operating expenses.
Management, taxes, insurance, maintenance
Typically 5–10%
Before expenses
After all expenses
| Property Value | $300,000 |
| Monthly Rent | $2,200 |
| Annual Gross Rent | $26,400 |
| Vacancy Loss (5%) | -$1,320 |
| Effective Annual Rent | $25,080 |
| Annual Operating Expenses | -$8,400 |
| Net Operating Income | $16,680 |
| Gross Rental Yield | 8.799999999999999% |
| Net Rental Yield | 5.56% |
| Monthly Cash Flow | $1,390 |
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Gross Yield = Annual Rent ÷ Property Value × 100
Net Yield = (Annual Rent × (1 − Vacancy%) − Expenses) ÷ Property Value × 100
A gross rental yield of 5–10% is generally considered good. Net yields of 4–6% after all expenses are solid. High-demand markets (NYC, SF) often show lower yields (2–4%) due to high prices, but may offer stronger appreciation.
Gross yield = Annual Rent ÷ Property Value × 100. Net yield subtracts all annual operating expenses (management, taxes, insurance, maintenance, vacancy loss) before dividing by property value.
They're similar but not identical. Cap rate uses Net Operating Income (NOI) divided by property value. Net rental yield also accounts for NOI but may include financing effects. Cap rate is lender/appraiser standard; yield is investor vernacular.
Include: property management (8–12% of rent), property taxes, landlord insurance, maintenance (1% of value/year), vacancy allowance (5–10%), HOA fees, and any utilities you pay.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.