# Rental Yield Calculator

Enter all values to calculate:

## What is Rental Yield?

Rental yield is the return an investor is likely to receive on a property through rent.

It is the rate or the percentage of returns from the rental income.

Ideally, 7% or more is considered as a good rental yield.

## Vacancy Rate Table:

 Vacant Month Vacancy Rate 1 0.083 2 0.166 3 0.25 4 0.33 5 0.416 6 0.5 7 0.583 8 0.66 9 0.75 10 0.833 11 0.916 12 1

## Rental Yield Formula:

There are two values to be calculated in Rental Yield.

1. Gross rental yield = annual rental income/ property value x 100
2. Net rental yield = [Annual rental income* (1 – Vacancy Rate)] – Annual maintenance / Total property cost x 100

Example:

If the Property value is \$450000 which receives annual rent of \$21,000 and has an annual maintenance of \$1000. What is the Gross rental yield ?

Gross rental yield = annual rental income/ property value x 100

Here,

Gross rental yield = \$21,000/ \$450000 x 100 = 4.667%

Gross rental yield would be 4.667%

If the Property value is \$450000 which receives annual rent of \$21,000 and has an annual maintenance of \$1000 and is vacant for one month in a year. What is the Net rental yield ?

Here, Vacancy rate = number of vacant months / 12  = 1/12 = 0.0833

Net rental yield = [Annual rental income x (1 – Vacancy Rate)] – Annual maintenance / Total property cost x 100

Net rental yield = \$21,000 x (1 -0.0833) – \$1000 / \$450000 x 100 = 4.0557%

Net rental yield would be 4.0557%