Rental Yield Calculator

Use this calculator to estimate rental yield from annual rent and current property value. It helps property investors compare income return across rentals, suburbs, and purchase opportunities before looking at wider return metrics.

What this calculator does

The rental yield calculator shows how much annual rental income a property produces relative to its value.

It uses:

• annual rent
• property value
• income before expenses
• percentage return

This gives you a simple yield percentage that can be used as an initial screen before deeper analysis.

How to use the rental yield calculator

Enter the annual rent and the property value. Use current market value if you are assessing an existing property, or expected purchase value if you are reviewing a potential deal.

Keep the rent and value on the same basis. If you only know monthly rent, multiply it by 12 before using the formula.

Rental Yield Formula

Rental yield = annual rent / property value x 100

Where annual rent is the total rent expected over one year and property value is the current or expected value of the property.

Example calculation

If:

• Annual rent = 24,000
• Property value = 400,000
• Formula = 24,000 / 400,000 x 100
• Rental yield = 6.00%

A property worth 400,000 that earns 24,000 per year has a rental yield of 6.00%.

What is rental yield?

Rental yield is a percentage measure of income return. It focuses on rent compared with property value, so it is useful for comparing properties of different sizes and prices.

It does not include expenses, finance costs, tax, vacancy, or capital growth. For that reason, it is best treated as a quick first-pass metric rather than a complete investment return.

Interpreting your result

A higher rental yield usually means the property generates more income for each unit of value. That can support cash flow, but it does not automatically mean the property is better.

Review the yield alongside location quality, tenant demand, maintenance risk, and financing assumptions. For full profitability, compare this result with the ROI Calculator.

When to use this calculator

Use this calculator when you want to:

• compare two rental properties
• assess a potential purchase
• review rent against market value
• screen income-focused deals

Common mistakes

Common mistakes include:

• using monthly rent instead of annual rent
• using purchase price when current value is needed
• treating yield as profit after expenses
• ignoring vacancy and maintenance costs

FAQs

Is rental yield the same as ROI?

No. Rental yield measures rental income against property value, while ROI measures profit against total investment cost.

Can rental yield be used alone?

It is useful for screening, but investors should also review expenses, debt payments, taxes, and long-term growth assumptions.