Rental Yield Calculator
Gross and net rental yield side by side. Gross yield is what gets advertised and net yield is what you receive, and on Indian residential property the two are often a factor apart.
Also called: rental return calculator, gross yield.
2.7% net against a gross 3.75%. The gap is the 60,000 of costs and the 8% vacancy allowance, and it is the difference between the number in an advertisement and the number in your account.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.
How this is calculated
Gross yield is annual rent over property value and ignores everything that happens between the tenant paying and you banking it. Net yield subtracts a vacancy allowance, because no property is let every day of every year, and the running costs of tax, maintenance and insurance. Net is the figure to compare against a deposit rate or a bond, since those pay without maintenance.
net yield = (annual rent less vacancy, less costs) / property value- R
- Monthly rent (currency)
- v
- Vacancy allowance (decimal)
- C
- Annual costs (currency)
- V
- Property value (currency)
Method and limits
What it assumes
- The property value entered is current market value rather than purchase price.
What it deliberately does not model
- Mortgage interest is a financing cost rather than a property cost and is excluded, so this is an unlevered yield.
- Capital appreciation is not included and is usually the larger part of a property return.
Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator
Frequently asked questions
- Why is Indian residential yield so low?
- Because prices are set largely by expected appreciation rather than by rent. A two to three percent gross yield is normal, and net is lower again, which is why the investment case rests on the capital value.