How this calculator works
Gross yield compares a full year of rent with the purchase price. Net yield reduces rent for expected vacancy and subtracts operating costs such as taxes, insurance, management and repairs. It helps compare properties before financing.
Net yield = (12 × rent × (1 − vacancy / 100) − expenses) / price × 100P = starting amount; C = monthly contribution; G = target; r = monthly rate; n = months; y = years, where applicable.
Example you can check
A $100,000 property renting for $1,000 a month with no vacancy and $2,000 annual operating costs has a 10% net yield and 12% gross yield.
Assumptions & limitations
Purchase-price denominator, constant rent and estimated vacancy. Debt payments, acquisition costs, income tax, appreciation and capital improvements are excluded. This is not cash-on-cash return. Do not include mortgage payments in operating expenses.
Common questions
Should mortgage payments go in expenses?
No. This yield measures the property before financing. Mortgage payments require a separate cash-flow analysis.
Can net yield be negative?
Yes, when vacancy-adjusted rent is less than operating expenses.
Further reading: consumerfinance.gov educational guide. Our formula conventions and examples are described above.