Rental Yield Calculator

Rental Yield is evaluated from Property Purchase Price, Monthly Rental Income and Annual Insurance. The calculation reports Gross Annual Rent, Effective Annual Rent and Total Annual Expenses.

Results

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About the Rental Yield Calculator

Rental Yield is treated here as a quantitative relation between Property Purchase Price, Monthly Rental Income, Annual Insurance and Annual Property Tax and Gross Annual Rent, Effective Annual Rent, Total Annual Expenses and Net Operating Income.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
_pv = parseFloat(property_value)
_mr = parseFloat(monthly_rent)
_ins = parseFloat(annual_insurance) || 0
_pt = parseFloat(annual_property_tax) || 0
_mnt = parseFloat(annual_maintenance) || 0
_mgmt = parseFloat(property_mgmt_pct) || 0
_vac = parseFloat(vacancy_rate) || 0
annual_rent_gross = _mr * 12
effective_annual_rent = annual_rent_gross * (1 - _vac / 100)
_mgmt_fee = effective_annual_rent * (_mgmt / 100)
total_expenses = _ins + _pt + _mnt + _mgmt_fee
net_annual_income = effective_annual_rent - total_expenses
gross_yield = (annual_rent_gross / _pv) * 100
net_yield = (net_annual_income / _pv) * 100

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

_pv = parseFloat(property_value)
_mr = parseFloat(monthly_rent)
_ins = parseFloat(annual_insurance) || 0
_pt = parseFloat(annual_property_tax) || 0
_mnt = parseFloat(annual_maintenance) || 0
_mgmt = parseFloat(property_mgmt_pct) || 0
_vac = parseFloat(vacancy_rate) || 0
annual_rent_gross = _mr * 12
effective_annual_rent = annual_rent_gross * (1 - _vac / 100)
_mgmt_fee = effective_annual_rent * (_mgmt / 100)
total_expenses = _ins + _pt + _mnt + _mgmt_fee
net_annual_income = effective_annual_rent - total_expenses
gross_yield = (annual_rent_gross / _pv) * 100
net_yield = (net_annual_income / _pv) * 100

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: Houston rental house: $280K purchase, $2,100/month rent

Inputs

property_value: 280000 monthly_rent: 2100 annual_insurance: 2000 annual_property_tax: 5600 annual_maintenance: 2800 property_mgmt_pct: 10 vacancy_rate: 5
Gross Annual Rent: $25,200. Effective Annual Rent: $23,940. Total Annual Expenses: $12,794. Net Operating Income: $11,146. Gross Rental Yield: 9%. Net Rental Yield: 3.98%

With Property Purchase Price = 280,000, Monthly Rental Income = 2,100, Annual Insurance = 2,000 and Annual Property Tax = 5,600 as the stated inputs, the result is Gross Annual Rent = $25,200, Effective Annual Rent = $23,940 and Total Annual Expenses = $12,794. Each value corresponds to the declared output fields.

Example 2: NYC apartment: $650K, $3,200/month rent (luxury)

Inputs

property_value: 650000 monthly_rent: 3200 annual_insurance: 3000 annual_property_tax: 7800 annual_maintenance: 6500 property_mgmt_pct: 8 vacancy_rate: 3
Gross Annual Rent: $38,400. Effective Annual Rent: $37,248. Total Annual Expenses: $20,279.84. Net Operating Income: $16,968.16. Gross Rental Yield: 5.91%. Net Rental Yield: 2.61%

With Property Purchase Price = 650,000, Monthly Rental Income = 3,200, Annual Insurance = 3,000 and Annual Property Tax = 7,800 as the stated inputs, the result is Gross Annual Rent = $38,400, Effective Annual Rent = $37,248 and Total Annual Expenses = $20,279.84. Each value corresponds to the declared output fields.

Example 3: Short-term vacation rental: $350K beach house, $4,500/month (7 months season)

Inputs

property_value: 350000 monthly_rent: 4500 annual_insurance: 4000 annual_property_tax: 4200 annual_maintenance: 7000 property_mgmt_pct: 25 vacancy_rate: 42
Gross Annual Rent: $54,000. Effective Annual Rent: $31,320. Total Annual Expenses: $23,030. Net Operating Income: $8,290. Gross Rental Yield: 15.43%. Net Rental Yield: 2.37%

With Property Purchase Price = 350,000, Monthly Rental Income = 4,500, Annual Insurance = 4,000 and Annual Property Tax = 4,200 as the stated inputs, the result is Gross Annual Rent = $54,000, Effective Annual Rent = $31,320 and Total Annual Expenses = $23,030. Each value corresponds to the declared output fields.

Example 4: Multi-family: 4-unit building, $750K purchase, $1,400/unit/month

Inputs

property_value: 750000 monthly_rent: 5600 annual_insurance: 5000 annual_property_tax: 9000 annual_maintenance: 12000 property_mgmt_pct: 8 vacancy_rate: 8
Gross Annual Rent: $67,200. Effective Annual Rent: $61,824. Total Annual Expenses: $30,945.92. Net Operating Income: $30,878.08. Gross Rental Yield: 8.96%. Net Rental Yield: 4.12%

With Property Purchase Price = 750,000, Monthly Rental Income = 5,600, Annual Insurance = 5,000 and Annual Property Tax = 9,000 as the stated inputs, the result is Gross Annual Rent = $67,200, Effective Annual Rent = $61,824 and Total Annual Expenses = $30,945.92. Each value corresponds to the declared output fields.

Common Use Cases

  • Calculate gross and net rental yield on investment property
  • Compare rental yield across different properties
  • Decide whether a rental property is a good investment