Calculate gross rental yield, net yield and cap rate from the purchase price, rent, yearly costs and expected vacancy.
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Rental yield expresses a property's annual rent as a percentage of its price, which makes it easy to compare with other investments. Gross yield uses the rent alone. Net yield, also called the capitalisation rate, subtracts running costs such as property tax, insurance, maintenance and management.
The calculator applies a vacancy allowance to the rent before deducting costs, so the net figure reflects months when the property is empty. It excludes the mortgage, so the monthly cash flow shows the property before financing.
It depends on the market and the property type. Gross yields of 5 to 8 percent are common in many cities, while net yields are usually lower, often 3 to 5 percent. Compare the figure with local averages and with the return you would get from a bond or index fund.
Include property tax, insurance, maintenance and repairs, management fees, service charges, and any utilities you pay as landlord. Leave out the mortgage, which belongs in your financing calculation.
Use the share of months the property sits empty between tenants. Five percent (about two and a half weeks a year) is a common planning figure, while a property in a weak market may need more.
Net yield subtracts costs that gross yield ignores. Those costs can be large, so a high gross yield can still produce a modest net return.
No. Income tax on rental profit and capital gains tax on sale are separate and depend on your location and situation. Consider them before you decide.
No. The calculation runs entirely in your browser.