Calculate gross yield, net yield, and cap rate on a rental — with realistic expense lines, not just rent over price.
Gross yield ignores every cost. Net yield tells the truth. This calculator models tax, insurance, vacancy, maintenance, management, and capex to give you the number that actually predicts cash flow.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
Annual rent as a percentage of property value.
Gross rental yield = annual rent ÷ property value × 100. A $300,000 property renting for $24,000/year has a 8% gross yield. Net rental yield subtracts operating expenses first.
Net yield of 5–8% is solid in most US markets.
Gross yields of 8–12% and net yields of 5–8% are typical for cash-flowing single-family rentals. High-cost coastal markets often run at 3–5% gross (banking on appreciation). Markets with 10%+ gross yields often have weak appreciation.
Net yield. Always.
Gross yield ignores property tax, insurance, vacancy, maintenance, and management. Net yield accounts for all of them and tells you what you actually pocket. A "10% gross" property can easily net 4–5% after real costs.
Cap rate = net yield (typically). Same idea, slight definitional differences.
Cap rate = NOI ÷ property value. Net rental yield uses the same approach but may include things cap rate excludes (debt service, sometimes capex). In practice, "cap rate" and "net yield" are often used interchangeably.
The mechanics in short answers — no jargon, no upsell.
The headline number everyone quotes. Ignores literally every cost — useful only for quick comparison, never for actual returns.
NOI = rent − operating expenses (tax, insurance, vacancy, repairs, management). Net yield = NOI ÷ value. This is the real number.
NOI ÷ value, expressed as a percentage. Used in commercial real estate to compare deals. For a single rental, cap rate and net yield are effectively the same number.
Cap rate measures property quality, independent of how you financed it. Cash-on-cash return (cash flow ÷ cash invested) is what tells you the leveraged ROI on your actual capital.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Three numbers, side by side, computed correctly.
Tax, insurance, vacancy, maintenance, management, capex — itemized.
See which deal actually nets more cash after all costs.
Default 8% — the typical landlord loses ~1 month of rent every 12.
See how much the yield changes if rent comes in 10% lower.
Cash flow at both time scales — the numbers landlords actually use.
Everything you might ask before, during, or after using this tool.
Always net yield (or cap rate) when comparing deals. Gross yield is useful for a "first glance" filter, but two properties with the same gross yield can have wildly different net yields based on tax rates, insurance cost, and condition.
Property tax, insurance, HOA, property management (8–10% of rent), vacancy allowance (8–10%), maintenance/repairs (5–10%), capex reserves (5–10%). Some investors use the "50% rule" — assume operating expenses are 50% of rent.
A rough heuristic that operating expenses on a rental property tend to equal about 50% of gross rent. Useful for back-of-envelope screening; not accurate enough for actual underwriting. Always model real expense lines.
No — cap rate / yield specifically excludes debt service. The property's yield is an attribute of the property, not your financing. Cash flow and cash-on-cash return are the metrics that include mortgage.
8% (about 1 month per year) is the US national average. High-quality long-term tenants might experience 2–4% vacancy; rougher markets or short-term rentals can see 15%+. Use local data when you have it.
Depends on your strategy. Cash-flow investors typically target net yields of 6%+; appreciation-focused investors accept 3–5% in markets expected to rise. Below 3% net is "speculation with rental income" — make sure you understand why.
No — yield is income only. Total return = yield + appreciation. A 4% yield property in a market growing 5%/year delivers a 9% total return; a 9% yield property in a flat market delivers 9%. Both can be reasonable, depending on what you want.
The "1% rule" says monthly rent should be at least 1% of purchase price. That equals a 12% gross yield. It's a screening heuristic — properties meeting it are usually decent cash-flow plays. Markets where it's impossible (most of CA, NYC) require yield-vs-appreciation thinking.
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Gross yield: annual rent ÷ property value. Quick screening only.
Net yield (= cap rate, basically): NOI ÷ property value. The real return on the property, unleveraged.
Cash-on-cash return: annual pre-tax cash flow ÷ cash invested. Your leveraged ROI given your specific financing.
All three matter, but for buying decisions, focus on net yield/cap rate first. Cash-on-cash depends on financing, which can change.
Property tax: easy to find, but rising — model 2–5% annual increases.
Insurance: shopping wins; rates jumped 30–80% in some markets 2022–2025.
Vacancy allowance: 8% (1 mo/yr) US average. Worse in transient markets.
Maintenance + repairs: 5–10% of rent — the "stuff breaks" line.
Capital expenditure reserves: 5–10% of rent for roof, HVAC, water heater (which all eventually replace).
Property management: 8–10% of rent if you use a manager (recommended for >5 doors or out-of-state).
Leasing fee: typically 1 month of rent per new tenant — paid to your manager or yourself.
Mid-American cash-flow markets (Memphis, Cleveland, Indianapolis): 10–15% gross yields, modest appreciation, more "work" properties.
High-cost coastal markets (SF, NYC, Seattle): 3–5% gross yields, often strong appreciation, capital-intensive.
Best returns: depends on your goal. Cash flow now = cash-flow markets. Long-term wealth = appreciation markets if you can afford the holding costs.
Rent drops 10%: do you still cash flow?
Vacancy spikes to 15%: do you still cash flow?
Major capex hits in year 2: can you afford it without selling?
Insurance doubles (it happens): does the deal still work?
If the answer to any of these is "no" without an emergency fund backstop, the deal is too tight.
Two short notes worth reading before you trust any number on this page.
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We are not a bank, NBFC, advisor, broker, or distributor of any financial product. The numbers shown here are estimates for educational purposes only, based on the inputs you provide.
Results are not financial, legal, or tax advice. Please consult a qualified professional before any decision about your loan, investments, or personal finances. Actual loan terms and charges depend on your bank and individual circumstances.
