Rental Yield Calculator

Q: What is a good rental yield for an investment property?

A good gross rental yield for investment properties in the US is typically 6–10%. Net rental yield (after expenses) of 4–6% is considered solid. Markets with yields above 10% (like Detroit, Cleveland, Memphis, Birmingham) offer high income but often lower appreciation. Premium markets like San Francisco (2–4% gross yield) and Manhattan offer low yields but strong long-term appreciation. Investors targeting cash flow should seek 8%+ gross yield; appreciation-focused investors may accept 4–6%.

Q: What is the difference between gross yield and net yield?

Gross rental yield = (Annual rent ÷ Property value) × 100. It does not account for expenses. Net rental yield = ((Annual rent − Annual expenses) ÷ Property value) × 100. Annual expenses typically include: property tax, insurance, maintenance (1–2% of value), vacancy allowance (5–8%), property management (8–12% of rent), and capital expenditure reserve. Example: $18,000 annual rent, $300,000 property, $8,000 annual expenses. Gross yield = 6%. Net yield = ($18,000 − $8,000) ÷ $300,000 = 3.3%.

Q: What is cash-on-cash return for rental properties?

Cash-on-cash return measures annual pre-tax cash flow relative to the actual cash invested (down payment + closing costs + repairs). Formula: Cash-on-Cash Return = (Annual Pre-Tax Cash Flow ÷ Total Cash Invested) × 100. Example: Down payment $60,000, closing costs $5,000, repairs $10,000 = $75,000 total cash invested. Annual cash flow after mortgage, taxes, insurance, management = $5,000. Cash-on-cash return = $5,000 ÷ $75,000 = 6.7%. Many investors target 8–12% cash-on-cash return as a minimum threshold.

Q: What is the price-to-rent ratio and how do you use it?

The price-to-rent ratio (P/R ratio) = Home price ÷ Annual rent. It indicates whether buying or renting is more economical in a market. P/R below 15: Buying favored, rent is expensive relative to prices. P/R 15–20: Neutral market, either makes sense. P/R above 20: Renting may be smarter, prices are high relative to rents. In 2026, most major US metros have P/R ratios of 18–35. San Francisco P/R is approximately 32, making renting economically sensible for many. Kansas City and Cleveland have P/R ratios of 12–15, strongly favoring buying.

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📊 Rental Yield Calculator

Calculate gross yield, net yield, cash-on-cash return, monthly cash flow, and price-to-rent ratio for any residential or commercial rental property.

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Rental Yield Analysis

Property purchase details, rent, and operating expenses

Purchase Price ($)

Down Payment (%)

Monthly Rent ($)

Annual Vacancy Rate (%)

Annual Property Tax ($)

Annual Insurance ($)

Annual Maintenance ($)

Property Management Fee (%) % of gross rent. Set 0 if self-managing.

Annual Other Expenses ($) HOA, landscaping, utilities, etc.

Mortgage Rate (%) (if financed)

Loan Term (years)

Annual Rent Growth (%)

Rental Yield Results

Data: ESTIMATE SEEK EXPERT ADVICE LAST UPDATED Apr 2026

Gross Yield

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Net Yield

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Monthly Cash Flow

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Cash-on-Cash Return

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Annual Income & Expense Breakdown

Gross Annual Rent—

− Vacancy Loss—

= Effective Gross Income—

− Total Operating Expenses—

= Net Operating Income (NOI)—

− Annual Mortgage Payment—

Annual Cash Flow—

Price-to-Rent Ratio—

Cap Rate (NOI / Price)—

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Key Rental Yield Benchmarks

Gross Yield

✅ Good: >8%

⚠️ Average: 5–8%

❌ Low: <5%

Net Yield

✅ Good: >5%

⚠️ Average: 3–5%

❌ Low: <3%

Cash-on-Cash

✅ Good: >8%

⚠️ Average: 4–8%

❌ Low: <4%

Price/Rent Ratio

✅ Buy favor: <15

⚠️ Neutral: 15–20

❌ Rent favor: >20

Frequently Asked Questions

What is the difference between gross and net yield? +

Gross yield = (annual rent / purchase price) × 100. It ignores all costs. Net yield = (NOI / purchase price) × 100, where NOI = rent minus all operating expenses (taxes, insurance, maintenance, management). Net yield is more accurate but requires knowing your actual expenses.

What is cash-on-cash return? +

Cash-on-cash return = annual pre-tax cash flow / total cash invested (down payment + closing costs). Unlike cap rate, it accounts for financing — so the same property will have a different CoC at 20% vs 25% down. A higher CoC means your cash is working harder.

What is the 1% rule? +

The 1% rule says monthly rent should be at least 1% of purchase price (e.g., $3,500/mo on a $350k property). It's a quick screening filter, not a full analysis. Markets with high appreciation often fail the 1% rule but still produce strong total returns. Always run a full cash flow analysis.

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Financial estimates only — not professional advice. Results are calculated projections based on your inputs. Yield calculations are estimates based on your inputs and standard expense ratios. Actual returns depend on local market rents, occupancy, management quality, and property-specific costs. Real estate investments involve risk. Consult a licensed financial advisor, CPA, or real estate attorney before making investment decisions. Full disclaimer →