Rental yield calculator

How this estimate works

Gross yield = monthly rent × 12 / price × 100. Net yield = (annual rent after vacancy − maintenance − tax − insurance) / (price + purchase costs) × 100.

Rental yield relates annual rental income to the money tied up in the property. It helps organise an estimate, but it cannot establish what rent a tenant will actually pay. Use an agreed rent where you have one. If you use asking rent, label it in your own notes and test a lower rent or a longer vacancy before relying on the result.

Gross yield uses rent before owner expenses and divides by the property price. Net yield reduces rent for the vacancy allowance you enter, subtracts annual maintenance, property tax and insurance, and includes purchase costs in the denominator. The difference makes clear why a headline gross percentage can overstate the cash return from ownership. An explicit zero expense should mean you checked that cost rather than forgot it.

Use only the maintenance that the owner will bear. Where the tenant pays a charge directly, adding it as an owner expense as well can double-count it. Property tax should come from the appropriate bill or assessment. Insurance and purchase costs should come from your own quotations. A reserve for repairs, letting fees or occasional refurbishment can be included in owner-paid maintenance if you keep that treatment consistent.

This estimate is unlevered and before income tax. It excludes mortgage payments, appreciation, sale costs and the tax treatment of rent. A negative net yield is possible when costs exceed collected rent; the tool displays it rather than replacing it with zero. There is no assumed normal yield or city benchmark. Compare like-for-like properties and verify the lease, achievable rent, recurring bills and legal use before treating a projected percentage as an investment decision.

A property can have an attractive gross yield and still require cash during an extended vacancy. Test the scenario without assuming immediate replacement of a departing tenant. Rent collection delays and repair periods need a funding plan even where the eventual annual total looks acceptable. Yield is a ratio for organising those assumptions, not evidence that a tenancy will remain occupied.

Sources and limits

• Reducing-balance EMI formula, monthly interest and constant-rate repayment assumptions. Kotak Mahindra Bank, checked 2026-11-12. Effective basis: not stated by publisher.

Questions about this tool

This is general information, not legal, tax or financial advice. Check with a qualified professional for your case.

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