Divide annual rent by property price for gross yield percent and monthly rent equivalent.
Overview
Gross rental yield shows income return before expenses: annual rent divided by property price.
Enter purchase price (or value) and annual rent. Yield% = annualRent ÷ price × 100; monthly rent = annual ÷ 12.
Net yield after taxes, vacancies, and maintenance will be lower—use this as a first screen, then stress expenses.
Steps
Purchase price or current value.
Expected rent for a full year.
Review gross yield and monthly rent equivalent.
Lower annual rent to model empty months.
Rank properties by yield before deeper underwriting.
Math
grossYield% = annualRent / propertyPrice × 100
Gross yield is annual rent as a percent of property price.
Worked cases
24,000/300,000 = 8%
8% gross yield ($2,000/mo).
6% yield
6% gross yield.
12% yield
12% gross yield.
Why use this
Questions