Net Yield Calculator
Find your net yield in seconds and see how it compares to your gross yield. Enter your income (monthly or annual rent for a property), subtract annual running costs and vacancy, and divide by the investment value, with optional purchase costs added to the denominator.
Estimate only. Yield is shown before tax and excludes financing costs unless you include them in annual costs.
Worked example, checked against this exact tool
A property worth $250,000 rents for $2,000 a month ($24,000 a year). With a 5% vacancy rate, effective income is $22,800; annual costs are $6,000; purchase costs were $8,000. Net income = $22,800 − $6,000 = $16,800. Denominator = $250,000 + $8,000 = $258,000. Net yield = $16,800 ÷ $258,000 × 100 = 6.51%, against a gross yield of 9.30%. Costs and vacancy eat 2.79 percentage points.
Gross yield vs net yield
Gross yield divides the headline annual income by the price and ignores every cost. It is useful for a first-pass comparison of listings. Net yield subtracts running costs (management, insurance, maintenance, taxes) and vacancy first, so it is the number that describes what you actually earn. A 9% gross yield that becomes 6.5% net is normal; a property whose net yield collapses below 4% is usually overpriced or under-rented.
Why vacancy belongs in the calculation
Most beginner calculations assume 12 months of rent, but the average US rental sits empty several weeks a year. A 5% vacancy rate is roughly two and a half weeks, which is conservative for most markets. Enter your market's real number: student lets and short-term rentals can run 10% or more, while tight long-term markets sit near 3%.
Should purchase costs go in the denominator?
Strict net-yield definitions divide by the property value alone. Adding purchase costs (stamp duty, legal fees, refurbishment) gives the yield on the cash you actually tied up, which is the more honest number for comparing investments. The tool leaves it optional so you can report either version.
What competing calculators miss
The best-known rental yield tools each leave something out: one handles vacancy but not purchase costs, another shows benchmark bands but no vacancy input, a third is UK-only with stamp duty baked in. This calculator combines all three inputs on one page, shows the gross-to-net gap in both percent and dollars, and adds copy/share so you can send the numbers to a partner or lender.
Frequently asked questions
How do you calculate net yield?
Subtract annual costs from your effective annual income (after vacancy), then divide by the investment value and multiply by 100. With $16,800 of net income on $258,000 of capital, the net yield is 6.51%.
What is the difference between gross yield and net yield?
Gross yield = annual income ÷ price × 100, ignoring all costs. Net yield subtracts running costs and vacancy first, so it reflects what you actually keep.
What is a good net rental yield?
In most US markets, 4-6% net is typical, 6-8% is strong, and 8%+ is exceptional but often signals higher risk. Below 4% net usually means the property is overpriced or under-rented.
Should I include vacancy in my yield calculation?
Yes. Ignoring vacancy overstates income by 3-10% in most markets. A 5% allowance (about two and a half weeks empty) is a conservative starting point.
Do I divide by price or by total cash invested?
Standard net yield uses the property value. Adding purchase costs gives the yield on your actual cash committed, which is better for comparing investments side by side.
Is yield shown before or after tax?
Before tax. Yield is a pre-tax investment metric; your after-tax return depends on your tax situation.
Does net yield include mortgage payments?
Not automatically. This tool measures the property's own return; if you want a leveraged return, add your annual mortgage interest to the annual costs field.
Can I use this for non-property investments?
Yes. Enter any annual income, annual costs and investment value: the formula works for dividends, business income and other assets too.
Why is my net yield negative?
Your costs plus vacancy exceed your income. That means the investment loses money every year on a cash-flow basis before any capital growth.
How does net yield differ from ROI?
Net yield is the annual income return only. Full ROI adds capital growth (or loss) to that income return over the holding period.