Rental Yield Calculator

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How to Calculate Rental Yield

Rental yield formula:

\text{Rental Yield (\%)} = \left( \frac{\text{Net Annual Income}}{\text{Property Purchase Price}} \right) \times 100

Where:

  • Net Annual Income = Annual Rental Income – Annual Costs
  • Property Purchase Price = Total cost of acquiring the property

Example

Imagine you own a rental property with the following details:

  • Annual Rental Income: $18,000
  • Property Purchase Price: $300,000
  • Monthly Costs: $300 (maintenance, insurance, etc.)

Calculation:

  1. Annual Costs = $300 × 12 = $3,600
  2. Net Annual Income = $18,000 – $3,600 = $14,400
  3. Rental Yield = \left( \frac{14,400}{300,000} \right) \times 100 = 4.8\%

The rental yield for this property is 4.8%.