Get a rental's gross and net yield — annual rent as a percentage of price, before and after running costs.
Gross yield = annual rent ÷ price; net yield subtracts operating costs first. Neither includes mortgage payments, vacancy allowance, or appreciation. Use alongside cap rate and cash-on-cash. Not investment advice.
Gross yield is annual rent divided by price — a fast first-pass screen. Net yield subtracts running costs (taxes, insurance, maintenance, management) to show what the property actually returns before financing. The gap between them tells you how expense-heavy the property is.
Gross yield = annual rent ÷ price · Net yield = (annual rent − costs) ÷ price
Rental yield expresses a property's rent as a percentage of its price. Gross yield is annual rent ÷ price and is what listings and headlines quote because it is bigger. Net yield subtracts the annual costs of owning and running the property first, and it is the only one that tells you what you actually earn. In US terms, net yield on price is the cap rate; the yield language is more common in the UK, Australia, and among international investors, but the arithmetic is identical.
Price $300,000, rent $2,200 a month ($26,400 a year), annual costs $6,000. Gross yield is $26,400 ÷ $300,000 = 8.8%. Net income is $20,400, so net yield is 6.8%. The two-point gap is the property's expense load, here about 23% of rent, which is on the light side. Add a realistic vacancy allowance, a repair reserve, and management, and most long-term rentals carry 35–45% of rent in costs, pushing net yield closer to 5%. When a listing's gross and net yields sit within a point of each other, the net figure is almost certainly missing something.
It depends on the market and on what you are giving up. Net yields of 6–8% are typical of US cash-flow markets; 3–5% is common in expensive metros, where buyers are underwriting appreciation instead. The comparison that matters most is against your borrowing cost: a net yield below your mortgage rate means every borrowed dollar loses money (negative leverage), and your return on cash will be lower than the yield itself. A second sanity check is against a risk-free rate: if a government bond pays 4–5% with no tenants, a 5% net yield is paying you very little for the work and the risk.
Yield is the income half of a property's return; the other half is capital growth, and the two usually trade off. High-yield markets tend to appreciate slowly; low-yield markets tend to appreciate faster, at least historically. An investor who needs monthly income buys yield; one with a long horizon and other income may accept a low yield for growth. Deciding which you are is more important than any single yield number.
Yield is a one-year, pre-financing snapshot. Once you want to know the return on the cash you actually invest, with a mortgage and taxes included, the next tools are cash-on-cash and DSCR, and a spreadsheet that holds all of them for each property you are considering.
They're close cousins — net yield and cap rate are nearly the same idea. "Yield" is used more in the UK/Australia, "cap rate" in the US. Both exclude the mortgage.
Varies by market; many investors look for net yields around 5%+ , but low-yield prime markets can still win on appreciation. Compare locally.
Related: cap rate calculator · cash-on-cash return calculator · 1% rule calculator · all free calculators.
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Last reviewed: September 2026. Free to use, no signup — Rental Yield Calculator by ToolWise Digital.
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