1. What is Rental Yield?

Rental yield is a percentage figure that calculates the return on investment you might anticipate from a rental property. It compares the annual rental income to the property's value.

2. How Does the Calculator Work?

The calculator uses the rental yield formula:

Where:

• Annual rent — Total yearly rental income in dollars
• Property value — Current market value or purchase price of the property in dollars

Explanation: The equation shows what percentage of the property's value you earn back each year through rent.

3. Importance of Rental Yield Calculation

Details: Rental yield helps investors compare different properties, assess investment performance, and make informed buying decisions.

4. Using the Calculator

Tips: Enter the total annual rent (before expenses) and the property's current market value or purchase price. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a good rental yield?
A: Generally, 5-8% is considered good, but this varies by location and property type. Higher yields often come with higher risk.

Q2: Should I use gross or net yield?
A: This calculator shows gross yield. For net yield, subtract annual expenses from the rent before calculating.

Q3: How does yield differ from ROI?
A: Yield only considers rental income vs property value, while ROI includes all costs, expenses, and capital growth.

Q4: Why do yields vary by location?
A: Property values and rental demand differ between areas, affecting the ratio between rent and property price.

Q5: Should I only consider high-yield properties?
A: Not necessarily. Lower-yield properties in prime locations may offer better long-term capital growth.