🏘️ Rental Yield Calculator

A good rental yield depends on location and property type. Generally, a gross yield of 5–8% is considered solid for residential property in most US markets. Properties in high-demand urban areas may yield 3–5% gross but offer stronger capital growth. Regional or suburban markets often yield 7–10%+ gross. Net yield (after expenses) is typically 1.5–3 percentage points lower than gross.

Gross yield is calculated solely from rental income divided by property value — it ignores running costs. Net yield deducts all ongoing expenses (maintenance, insurance, management fees, vacancy losses, rates) before dividing by the property value. Net yield is the better measure of actual return on investment, as gross yield can be misleading when expenses are high.

Vacancy directly reduces your effective rental income. A 5% vacancy rate means the property sits empty for about 2.5 weeks per year, reducing annual rental income by 5%. High-vacancy areas or properties with frequent tenant turnover can significantly erode net yield. Always factor in a realistic vacancy rate (typically 3–8%) when evaluating investment returns.

For an accurate net yield calculation, include: property management fees (typically 6–12% of rent), routine maintenance and repairs (1–2% of property value per year), landlord insurance, property taxes, body corporate or HOA fees, council rates, accounting fees, and a vacancy allowance. Mortgage interest payments are sometimes excluded from yield calculations and considered separately as a financing cost.