Gross Rental Yield Calculator Formula

Understand the math behind the gross rental yield calculator. Each variable explained with a worked example.

Use the Gross Rental Yield Calculator

Formulas Used

Gross Rental Yield

gross_yield = (annual_rent / purchase_price) * 100

Annual Rental Income

annual_income = annual_rent

Monthly Yield

monthly_yield = (monthly_rent / purchase_price) * 100

Variables

VariableDescriptionDefault
purchase_pricePurchase Price(USD)250000
monthly_rentMonthly Rent(USD)2000
annual_rentDerived value= monthly_rent * 12calculated

How It Works

Gross Rental Yield

Gross rental yield is the simplest measure of rental property return, using total rent before any expenses.

Formula

Gross Yield = (Monthly Rent x 12) / Purchase Price x 100

Advantages

  • Quick to calculate with minimal data
  • Easy to compare across properties
  • Useful for initial screening before deeper analysis

    • Worked Example

    A property purchased for $250,000 rents for $2,000 per month.

    purchase_price = 250000monthly_rent = 2000
    1. 01Annual rent: $2,000 x 12 = $24,000
    2. 02Gross yield: $24,000 / $250,000 x 100 = 9.60%
    3. 03Monthly yield: $2,000 / $250,000 x 100 = 0.800%

    Ready to run the numbers?

    Open Gross Rental Yield Calculator