Rental Yield Calculator

Because they're calculated identically here: both are Net Operating Income divided by Property Value. 'Net yield' and 'cap rate' are two names investors commonly use for the same underlying concept — income return relative to asset value — used in slightly different contexts (yield language is more common internationally, cap rate more common in US commercial real estate), so this calculator shows both labels rather than picking one and dropping the other.

By standard real estate convention, yield and cap rate are meant to measure how a property performs as an income-producing asset independent of financing — an all-cash buyer and a heavily-financed buyer looking at the identical property would calculate the identical Net Yield and Cap Rate, even though their pocketed cash flow differs enormously. Your mortgage payment shows up instead in Monthly Cash Flow and Annual Cash Flow, which do account for it.

Gross Yield is simply annual rent divided by property value — a fast, back-of-envelope comparison that ignores expenses entirely. Net Yield subtracts vacancy loss and operating expenses (property tax, insurance, maintenance, and management fees) from that rent first, so it's meaningfully lower than Gross Yield for most properties and a more realistic measure of actual income performance.

Net Yield is calculated before your mortgage payment, so a property can have healthy Net Operating Income relative to its value (positive Net Yield) while still losing money monthly once debt service is subtracted — this is common on properties bought with a large mortgage relative to their rental income, and it's exactly why Cash Flow and Net Yield are reported as separate figures rather than combined into one number. When cash flow is negative, the income breakdown chart shows only the portion of your mortgage that rent actually covers — the remainder is money you contribute out of pocket rather than a share of rental income, so it is not part of the pie.

There's no single universal benchmark — acceptable yields vary substantially by market, property type, and how much appreciation potential an investor expects versus pure income return. Higher-cost coastal markets often see lower cap rates (investors accepting less income yield in exchange for expected appreciation), while lower-cost markets often require higher cap rates to attract the same investor capital. Compare a property's figures against similar properties in the same specific market.