Gross Rental Yield Calculator

Use this calculator to estimate gross rental yield from annual rent and purchase price. It helps property investors compare income return before expenses, financing, and tax are included.

What this calculator does

The gross rental yield calculator measures annual rental income as a percentage of the price paid for the property.

It uses:

• annual rent
• purchase price
• gross income
• percentage yield

This gives you a quick view of the income return expected from a property before operating costs are deducted.

How to use the gross rental yield calculator

Enter the annual rental income and the purchase price. If rent is quoted monthly, multiply it by 12 before comparing it with the purchase price.

Use the full property purchase price, not just the deposit or cash contributed. Gross rental yield is based on the property price, not the financed amount.

Gross Rental Yield Formula

Gross rental yield = annual rent / purchase price x 100

Where annual rent is the expected yearly rent and purchase price is the amount paid for the property.

Example calculation

If:

• Annual rent = 30,000
• Purchase price = 500,000
• Formula = 30,000 / 500,000 x 100
• Gross rental yield = 6.00%

A property bought for 500,000 and rented for 30,000 per year has a gross rental yield of 6.00%.

What is gross rental yield?

Gross rental yield is the rental income return before deducting costs. It is often used when scanning listings because rent and price are usually easy to estimate.

It is not the same as net yield. It does not account for repairs, insurance, management fees, vacancy, rates, levies, or loan repayments.

Interpreting your result

A strong gross yield can indicate good income potential, but the actual investment result depends on costs and financing. Some properties with attractive gross yields have high expenses that reduce the real return.

For a cleaner view after expenses, compare this result with net rental yield or use the ROI Calculator.

When to use this calculator

Use this calculator when you want to:

• compare listing income potential
• screen rental property deals
• estimate yield before expenses
• benchmark rents against purchase price

Common mistakes

Common mistakes include:

• using net rent instead of gross rent
• excluding part of the purchase price
• comparing gross yield with net yield
• ignoring high recurring expenses

FAQs

Is gross rental yield before expenses?

Yes. Gross rental yield uses rent before operating costs, financing costs, tax, and vacancy.

Why use purchase price instead of property value?

Purchase price is useful when assessing a deal at acquisition. Current value is better for reviewing an existing holding.