Rental Yield Reality Check
See what rental properties actually return after expenses. The real yield, not the optimistic version.
Real estate agents love to quote gross yields. A $500K property renting for $30K/year sounds like 6% return, right? But that's before expenses eat into your income. Property management, maintenance, insurance, property taxes, vacancy — they all add up. Net yield is often 2-3% lower than gross. This calculator shows you both numbers so you can see the reality. That 6% gross might be 3.5% net. Still worth it? Maybe. But make that decision with real numbers, not the optimistic version.
Calculator
Common use cases
- Evaluating rental properties honestly
- Comparing property yields to other investments
- Understanding why landlords aren't all rich
- Making informed buy vs. rent decisions
How to use
- Enter the property value or purchase price
- Input annual rental income
- Add annual expenses (management, maintenance, insurance, taxes)
- Compare gross and net yields
FAQ
What's a good rental yield?
Gross yields of 5-8% are typically considered good. Net yields of 4-6% are attractive.
What expenses should I include?
Include property management, maintenance, insurance, property taxes, vacancy allowance, and landlord insurance.
Should I focus on yield or capital growth?
It depends on your goals. Income investors prioritize yield; growth investors may accept lower yields for appreciation potential.
Why is net yield so much lower?
Expenses are significant. Management, maintenance, vacancy, insurance, and taxes easily consume 30-50% of gross rent.
This calculator provides illustrative estimates for planning purposes only and does not constitute financial, tax, or legal advice.