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Rental yield calculator

Gross and net rental yield, cap rate and monthly cash flow, plus cash-on-cash return and a multi-year cash flow projection.

Updated

$
$
Annual expenses
$a year
$a year
$a year
$a year
% of rent
%
Mortgage
$
% a year
Loan term
Growth assumptions
% a year
% a year

Your rental yield

Net rental yield

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Enter your numbers to see the yield.

  • Below 4%, poor
  • 4 to 6%, fair
  • 6 to 8%, good
  • 8%+, excellent
Gross yield
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Cap rate
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Monthly cash flow, before financing
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Annual cash flow, before financing
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Year 1 cash flow breakdown

Gross rental income
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Vacancy loss
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Property tax
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Insurance
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Maintenance
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HOA dues
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Property management
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Net operating income
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Cash flow and equity over time

  • Cumulative cash flow
  • Equity, property value minus loan balance

Year-by-year projection

Rent and expenses grow at the rate you set above; the mortgage payment stays fixed.

YearGross rentNet operating incomeMortgageCash flowProperty valueEquity

How it works

A rental yield calculator measures the annual income a rental property generates as a percentage of its price. Gross yield ignores expenses; net yield, also called cap rate, subtracts operating expenses; cash-on-cash return measures your actual return on the cash you put in when the property is financed.

  1. Enter the price and rent

    The property price and the monthly rent it brings in.

  2. Add expenses and financing

    Tax, insurance, maintenance, HOA, management and vacancy, plus a loan if you are financing it.

  3. Set growth assumptions

    How fast rent and the property's value are likely to grow, to see the projection.

Yield, cap rate and cash-on-cash

Gross yield = Annual rent / Price × 100 Net yield (cap rate) = Net operating income / Price × 100 Cash-on-cash return = Annual cash flow after the mortgage / Down payment × 100

Net operating income (NOI) is annual rent, minus vacancy loss, minus property tax, insurance, maintenance, HOA and management, but before any mortgage payment. Cap rate and net yield are the same calculation viewed two ways: cap rate is more common for comparing properties regardless of financing, while net yield is the residential term for the same number.

What is a good rental yield

  • Below 4%: generally considered poor. May not cover expenses or a mortgage with room to spare.
  • 4 to 6%: fair, common in high-demand urban areas that also expect strong appreciation.
  • 6 to 8%: good, solid cash flow while maintaining property quality.
  • 8% or more: excellent, often found in emerging markets or value-add properties.

Before you rely on the estimate

This calculator shows net operating income before debt service, so if the property is financed, subtract the mortgage payment for true cash flow, which the mortgage fields do automatically. It does not budget separately for major capital expenses such as a roof or HVAC replacement, typically 1 to 2% of the property value a year on top of routine maintenance, and it does not include your own income tax on the rental income.

Frequently asked questions

What is the difference between gross yield, cap rate and cash-on-cash return?

Gross yield equals annual rent divided by property price, ignoring expenses. Cap rate equals net operating income, rent minus operating expenses excluding the mortgage, divided by property price, used to value properties independently of financing. Cash-on-cash return equals annual after-mortgage cash flow divided by your down payment, measuring your actual return on the cash you invested.

What rental yield range is considered a good investment?

This calculator uses the scale below 4% as poor, 4 to 6% as fair, 6 to 8% as good, and 8% or more as excellent, based on gross yield. These benchmarks vary by market: high-appreciation cities such as San Francisco or Manhattan often show gross yields under 4% because appreciation makes up for income, while Midwest markets can yield 8 to 12%.

What operating expenses should I include in the net yield calculation?

Enter property tax, insurance, maintenance, HOA dues, a property management fee as a percentage of rent, and a vacancy rate as a percentage of gross rent. A common rule of thumb is that expenses consume 40 to 50% of gross rent, so a gross yield of 8% often becomes a net yield of 4 to 5%.

How does vacancy rate affect rental income?

Vacancy rate is the share of the year the unit sits empty. A 5% vacancy rate on $2,500 monthly rent costs $1,500 a year in lost income. The calculator subtracts this vacancy-adjusted loss from gross rent before computing net yield, cap rate and the projection, making the numbers more realistic.

Should I use the purchase price or current market value?

To decide whether to buy a property, use the purchase price. To track ongoing performance or compare with other properties you already own, use the current market value instead, sometimes called yield on value. The calculator uses the price you enter as the denominator, so enter whichever figure fits your purpose.