Rental Yield Calculator
Evaluate the profitability of your property investment by calculating rental yield.
Gross Yield
0.00%
Gross Yield = (Annual Rent / Property Cost) * 100
Net Yield = ((Annual Rent - Expenses) / Property Cost) * 100
What is a Rental Yield Calculator?
A Rental Yield Calculator helps real estate investors determine the return on investment (ROI) generated from a rental property. It calculates the annual rental income as a percentage of the property's total value. This is a crucial metric to compare different properties and decide which one offers better returns.
How It Works
The calculator computes two types of yields: Gross Yield (based on total rent vs property cost) and Net Yield (after deducting expenses like maintenance, taxes, etc.).
Example Calculation
You bought a flat for ₹50 Lakhs and rent it out for ₹20,000 per month.
- 1.Annual Rent = 20,000 * 12 = ₹2,40,000
- 2.Property Value = ₹50,00,000
- 3.Gross Yield = (2,40,000 / 50,00,000) * 100 = 4.8%
- 4.If Annual Expenses (Maintenance + Tax) = ₹40,000
- 5.Net Income = 2,40,000 - 40,000 = ₹2,00,000
- 6.Net Yield = (2,00,000 / 50,00,000) * 100 = 4%
Why This Tool is Useful
- ✓Helps identify high-performing investment properties.
- ✓Allows comparison between residential vs commercial properties.
- ✓Helps in setting the right rent amount to achieve desired ROI.
- ✓Accounts for hidden costs like maintenance and taxes (in Net Yield).
- ✓Essential for making data-driven real estate decisions.
Tips & Comparison
- •Commercial vs Residential: Commercial properties generally offer higher rental yields (6-10%) compared to residential properties (2-4%).
- •Location Matters: Properties in IT hubs or near universities often command higher rents and better yields.
- •Vacancy Risk: Always factor in a vacancy period (e.g., 1 month per year) when estimating annual rental income.
- •Capital Appreciation: Rental yield is only one part of ROI. Also consider the potential increase in property value over time.