Finance Calc App

US Rental yield calculator

Work out the gross and net rental yield on a buy-to-let or investment property, plus your annual cash flow and cash-on-cash return on the money you actually put in.

By Mitch Duncan Last reviewed Methodology

Property & rent

Maintenance, insurance, management/letting fees, service charges, and property tax — everything except mortgage interest.

For cash-on-cash return (optional)

Gross rental yield
6.00%
Net rental yield
4.50%
Income breakdown (annual)
Gross rent
$18,000.00
After vacancy allowance
$17,100.00
Running costs
−$3,600.00
Net operating income
$13,500.00
After financing
Mortgage payments
−$14,400.00
Annual cash flow (pre-tax)
-$900.00
Cash-on-cash return
-1.20%

Negative cash flow: running costs and the mortgage exceed the rent, so the property costs you money each year before any capital growth.

Yields use the current property value, so they fall as a property appreciates unless rent keeps pace. Figures are pre-tax and exclude capital growth, mortgage principal repayment, and one-off costs. This is an estimate, not investment advice.

What rental yield tells you

Rental yield expresses the rent a property earns as a percentage of its value — the headline measure of how hard your money works as an income investment. There are two versions, and the gap between them matters.

Gross yield = annual rent ÷ property value
Net yield = (annual rent − running costs) ÷ property value

Gross vs net yield

Gross yield ignores costs, so it always flatters the property. Net yield subtracts the real costs of ownership — maintenance, insurance, management or letting fees, service charges, and property tax — and is far closer to what you'll actually earn. A property advertised at a 6% gross yield can easily be a 3–4% net yield once costs are honest.

Worked example

A 300,000 property let at 1,500/month: gross rent is 18,000 a year, so gross yield is 18,000 ÷ 300,000 = 6%. After a 5% vacancy allowance (900) and 3,600 of running costs, net operating income is 13,500, giving a net yield of 4.5%.

Cash-on-cash return

Yield is measured against the whole property value, but if you used a mortgage you only invested a fraction of that. Cash-on-cash return measures annual pre-tax cash flow against the actual cash you put in (deposit plus buying costs):

Cash-on-cash = (net income − mortgage payments) ÷ cash invested

Leverage can lift cash-on-cash well above the net yield when rates are low — but it cuts both ways: if the mortgage costs more than the property earns, cash flow turns negative.

Why yields fall as a property appreciates

Because yield divides by current value, a property that doubles in price while rent stays flat sees its yield halve. That's why investors track yield against the price they paid (yield on cost) as well as current value, and weigh income yield against expected capital growth.

What this calculator doesn't cover

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Frequently asked questions

How do I calculate rental yield?
Divide the annual rent by the property's value and multiply by 100. For gross yield, use the full rent; for net yield, subtract annual running costs (maintenance, insurance, management fees, property tax) from the rent first. For example, 18,000 rent on a 300,000 property is a 6% gross yield.
What's the difference between gross and net yield?
Gross yield ignores the costs of owning the property, so it always looks higher. Net yield subtracts the real running costs — maintenance, insurance, letting or management fees, service charges, and property tax — and reflects what you actually earn. A 6% gross yield can easily be a 3–4% net yield once costs are accounted for.
What is a good rental yield?
It varies by location and property type, but many investors look for a net yield comfortably above what they'd earn risk-free in savings, to compensate for the work and risk. High-yield areas often have lower capital growth and vice versa, so yield should be weighed alongside expected price appreciation, not in isolation.
What is cash-on-cash return?
Cash-on-cash return measures your annual pre-tax cash flow against the actual cash you invested — typically the deposit plus buying costs — rather than the full property value. It's the better measure when you've used a mortgage, because it reflects the return on the money you really put in, magnified (up or down) by leverage.
Should I use the purchase price or current value for yield?
Both are useful. Yield on current value tells you the return the property offers today (relevant if you could sell and redeploy the money). Yield on your purchase price — 'yield on cost' — tells you how the original investment is performing. As a property appreciates, yield on current value falls even if your rent rises.
Does rental yield include tax and capital growth?
No. Yield is a pre-tax income measure and ignores any change in the property's value. Your actual return also depends on income tax on the rental profit, mortgage principal you pay down (building equity), and capital growth or loss when you sell. Treat yield as one input, not the whole picture.

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