Rental Yield Calculator
Calculate the potential rental yield of an investment property to assess its profitability.
Calculate Rental Yield
Understanding Rental Yield
Rental yield is a key metric for property investors, indicating the annual return on investment from rental income. It helps you compare the profitability of different properties.
This calculator takes into account the property's purchase price, ongoing expenses, and expected rental income to give you an estimated gross and net rental yield.
A higher rental yield generally indicates a more profitable investment, but it's important to consider other factors like capital growth and vacancy rates.
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Frequently Asked Questions
What is gross rental yield?
Gross rental yield is calculated by dividing the annual rental income by the property's purchase price, then multiplying by 100 to get a percentage. It doesn't account for any expenses.
What is net rental yield?
Net rental yield is a more accurate measure as it considers all property-related expenses (e.g., rates, insurance, maintenance, property management fees) in addition to the rental income and purchase price.
Why is rental yield important for investors?
Rental yield helps investors assess the income-generating potential of a property. It's a crucial factor in determining if a property will provide positive cash flow and contribute to your overall investment strategy.
Does a high rental yield always mean a good investment?
Not necessarily. While a high rental yield is attractive, it's essential to also consider factors like potential for capital growth, vacancy rates, property condition, and the overall market outlook. A balanced approach is key.