Rental Yield Calculator: Gross and Net Rental Yield

See gross and net rental yield, accounting for expenses and vacancy, not just the headline rent-to-price ratio.

Gross yield and net yield on a rental property can differ by several percentage points once vacancy and operating expenses are actually subtracted, which is exactly why quoting only the gross number is the oldest trick in a rental listing. This calculator produces both figures side by side, applying vacancy loss before expenses are ever subtracted, and neither number involves your financing — it measures the property, not your leverage.

How to calculate gross and net rental yield

  1. Enter the property price and the expected monthly rent. Gross yield is monthly rent × 12 ÷ price × 100: the default $2,000 a month on a $300,000 property is $24,000 a year, an 8% gross yield.
  2. Tick Include vacancy rate and enter the share of the year you expect the unit to sit empty. At 5%, the $24,000 becomes $22,800 of effective annual rent.
  3. Enter your annual operating expenses as one total. With $7,200 a year of expenses, net operating income is $22,800 − $7,200 = $15,600.
  4. Read the net yield: NOI ÷ price × 100, here $15,600 ÷ $300,000 = 5.2%, next to the 8% gross figure. Use Print / Save as PDF to keep the summary.

Gross yield is the number before anything gets subtracted

Gross yield is simply twelve months of rent divided by the purchase price, expressed as a percentage. It's the number most listings lead with because it's the biggest one, and it says nothing whatsoever about vacancy, taxes, insurance, or maintenance — which is exactly why it shouldn't be the only figure you underwrite a purchase on.

A property must have a price greater than zero for either yield to mean anything, so the calculator rejects a zero or negative price outright with an explicit error rather than dividing by zero and showing an infinite or undefined result.

Expenses to include in net yield

Vacancy comes out before expenses do, not after

Vacancy loss is applied to gross annual rent first, producing an effective annual rent, and only then are annual operating expenses subtracted to reach net operating income. Applying the two adjustments in that order — rather than netting out expenses first and applying a vacancy percentage to what's left — matters because it changes the resulting dollar figure whenever both a nonzero vacancy rate and nonzero expenses are entered together.

Leaving the vacancy field blank is treated as a 0% vacancy assumption — fully occupied all year — which is an optimistic default. If you don't have a real vacancy figure for the area, using 0% will overstate the net yield relative to almost any realistic operating history.

What is a good rental yield?

There is no single benchmark. Landlord and investor guides frequently describe gross yields in the mid-single digits as ordinary for many residential markets, but the useful comparison is against similar properties in the same area and against what your money would earn elsewhere.

Yield also trades off against growth. Expensive, in-demand areas tend to show low yields because buyers are paying for expected price rises, while cheaper areas often show high yields that compensate for slower appreciation, more turnover or higher maintenance. Judge a yield alongside the net figure, the local vacancy picture and your own goal — steady income or long-term capital growth.

Net yield, and what it deliberately leaves out

Net yield is net operating income divided by the purchase price. It's unlevered, meaning it says nothing about financing — a property bought entirely in cash and the same property bought with a mortgage produce the identical net yield here, because the calculator never sees a loan amount, a down payment, or a mortgage rate.

If you want a return figure that does account for financing, that's a cash-on-cash calculation, not a yield calculation — the two measure genuinely different things, and this tool intentionally stays on the unlevered side of that line.

Rental yield vs cap rate

Mathematically, the net yield here is the same calculation as a cap rate: net operating income divided by price. The difference is mostly in usage. Rental yield is the term residential landlords use, often quoted gross, while cap rate is the commercial real estate term and is always based on NOI.

For a commercial property, or if you also want the cash-on-cash return with a loan, the Commercial Real Estate (CRE) Cap Rate Calculator on this site takes an NOI you have already worked out and adds the financing side, while this page builds NOI up from rent, vacancy and expenses.

What a yield percentage can't tell you

Questions people ask about Rental Yield Calculator

What's a good rental yield?
It depends on the market and your goal. Investor guides often treat mid-single-digit gross yields as normal for many residential areas, with higher yields usually found where prices grow more slowly. Compare your net yield with similar local properties and with other uses of the same money rather than chasing one target number.
How does rental yield differ from cap rate?
Net rental yield and cap rate share the same formula, NOI divided by price, so on identical inputs they give the same percentage. Rental yield is the residential term and is often quoted gross, before costs; cap rate is the commercial term and always uses net operating income.
Should I focus on gross or net yield?
Use gross yield to screen listings quickly, since every listing can be compared on rent and price alone. Decide on net yield, because vacancy and running costs can easily take two or three points off the headline figure, as in the example where 8% gross becomes 5.2% net.
What counts as an operating expense for net yield?
Recurring costs of owning and letting the property: property tax, insurance, repairs and maintenance, management fees, HOA or service charges and landlord-paid utilities. Mortgage payments, income tax and one-off improvements such as a new kitchen are not operating expenses, and vacancy goes in its own field here.
Why is my net yield so much lower than the gross yield the listing advertised?
Listings almost always lead with gross yield because it ignores vacancy and expenses entirely. Once a realistic vacancy rate reduces the effective rent and then taxes, insurance, HOA, and maintenance are subtracted, the net figure is routinely several points lower — that gap is the actual cost of owning and operating the property, not a calculation error.
What vacancy rate should I actually use if I don't know one?
Leaving the field blank assumes 0%, which is optimistic for almost any market. A more realistic starting point is your local market's historical vacancy rate for comparable units, which a local property manager or multiple listing service data can usually provide — using 0% by default will overstate your expected return.
Does this calculator account for my mortgage payment?
No. Net yield here is unlevered — it's net operating income divided by purchase price, with no loan amount, down payment, or interest rate involved. If you want a return figure that reflects financing, look at a cash-on-cash return calculation instead, which is a different measurement built for that purpose.
Can I rely on this yield figure to decide whether to buy a property?
Treat it as one input, not a verdict. It doesn't account for appreciation, capital expenditures, property management fees, or closing costs unless you build them into your expense number yourself, and a real purchase decision should also involve a local property manager's rent opinion and, for financing questions, a qualified advisor.

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Content reviewed 2026-09-27.