Rental Yield Calculator

Calculate gross yield, net yield, cash-on-cash return, cap rate and monthly cash flow for any rental property. Free, private and no sign-up.

What is a free rental yield calculator online?

A free rental yield calculator online is a tool that measures how much income a rental property generates relative to its value. Investors use rental yield to compare properties across different markets, price points and strategies — a house with high yield is producing more income per dollar invested, while a house with low yield may be relying on capital appreciation instead.

This rental yield calculator online goes beyond a basic gross yield formula. It computes gross yield, net yield, capitalization rate (cap rate), cash-on-cash return, monthly cash flow, payback period, and debt service coverage ratio — the same metrics professional investors use, in one free tool.

How to use this free rental yield calculator online

1. Select your currency.
2. Enter the purchase price and any closing costs (stamp duty, legal fees, mortgage arrangement fees).
3. Add the expected monthly rent and any other income (parking, laundry, storage).
4. Set your vacancy allowance as weeks per year — a typical range is 1 to 4 weeks.
5. Add management fee (either as % of rent or as months per year).
6. Enter annual expenses: property tax, insurance, HOA or service charge, and other costs.
7. Set maintenance and CapEx reserves as a percentage of rent.
8. Optionally enter your mortgage details for cash-on-cash return and cash flow.
9. Read the results instantly — gross yield, net yield, cap rate, cash flow and more.

What is rental yield?

Rental yield is the annual rental income a property generates, expressed as a percentage of its value or purchase price. It answers a simple question: for every dollar you invest in the property, how much income does it return each year?

Yield allows you to compare a $200,000 apartment in one city to a $500,000 house in another on a like-for-like basis. Two properties with very different prices and rents can be compared instantly by looking at their yields.

Gross yield vs net yield

Gross rental yield

Gross yield divides annual rent by property value. It ignores all operating costs, so it is a quick first-pass filter but not a profitability measure.

Gross yield = (Annual rent ÷ Property value) × 100

Net rental yield

Net yield subtracts annual operating costs from rent before dividing by property value. It gives a much more honest picture of what the property actually returns.

Net yield = ((Annual rent − Operating expenses) ÷ Property value) × 100

Operating expenses include vacancy loss, management fees, maintenance, CapEx reserves, property tax, insurance, HOA or service charges, and any other recurring costs.

What is a good rental yield?

What counts as a "good" yield depends on the market and your investment strategy. Rough ranges:

• United States: 6–8% gross yield is typically considered strong. Sun Belt markets often reach 8–10%.
• United Kingdom: 4–6% gross yield is common. High-yield northern cities reach 7–8%.
• Australia: 3–5% gross yield is typical in capital cities.
• Singapore, Hong Kong, Tokyo: 2–4% gross yield is common due to high capital values.
• Emerging markets: 8–12% gross yield is achievable but often carries higher currency or political risk.

Lower-yield markets tend to offer stronger capital appreciation, while higher-yield markets tend to offer stronger cash flow. Neither is inherently better — the right yield depends on whether you are investing for income or for growth.

Cap rate vs rental yield vs cash-on-cash return

Cap rate (capitalization rate)

Cap rate is net operating income (NOI) divided by purchase price. It ignores financing entirely, so it measures the property's income performance independent of how you funded it. Cap rate is the standard metric for comparing properties of similar type in the same market.

Cap rate = (NOI ÷ Purchase price) × 100

Rental yield

Rental yield and cap rate are similar. Gross yield uses gross rent; net yield uses NOI. In practice, when investors say "yield," they usually mean net yield.

Cash-on-cash return

Cash-on-cash return measures the return on your actual cash invested. It is calculated as annual pre-tax cash flow divided by total cash invested (down payment plus closing costs). Unlike yield or cap rate, it accounts for the mortgage — which is why it can be much higher or much lower than yield.

Cash-on-cash return = (Annual pre-tax cash flow ÷ Total cash invested) × 100

Debt Service Coverage Ratio (DSCR)

DSCR is net operating income divided by annual debt service (mortgage payments). Lenders use it to judge whether a property generates enough income to safely cover its mortgage. A DSCR of 1.0 means the property exactly covers its debt. Most lenders require 1.20 or higher for investment properties.

DSCR = NOI ÷ Annual mortgage payments

Why vacancy allowance matters

A vacancy allowance is the proportion of the year you expect the property to sit empty between tenants. It is not a pessimistic assumption — it is a realistic one. Even in strong rental markets, most landlords experience 2 to 4 weeks of vacancy per year on average, plus additional downtime during major repairs or tenant turnover.

Ignoring vacancy overstates income by 4 to 8 percent on every calculation, which can turn a marginal deal into what looks like a good one. This calculator subtracts vacancy before computing net yield and cash flow.

Purchase costs every investor should include

• Stamp duty or transfer tax — varies by country, can reach 5–10% of price
• Legal fees — 0.5–2% of price
• Mortgage arrangement fees — 0.5–2% of loan amount
• Survey and inspection — flat fee
• Initial repairs and cosmetic work — varies widely

Total purchase costs are typically 3 to 12 percent of the property price, depending on the market. Including them in the "property value" basis lowers your effective yield and produces a more honest picture.

Common mistakes in rental yield calculations

• Using gross yield only. Gross yield flatters every property because it ignores every cost.
• Forgetting vacancy. Income lost to empty months is real and recurring.
• Underestimating maintenance. A common industry rule of thumb is 1% of property value per year, or 5–10% of rent.
• Ignoring CapEx reserves. Roofs, HVAC systems and water heaters have finite lifespans. Setting aside 3–5% of rent for capital replacements prevents nasty surprises.
• Confusing yield with cash flow. A property can have a high yield and still be cash-flow negative if mortgage payments eat the income.

Frequently asked questions