Real Estate

Rental Yield Calculator

Calculate gross and net rental yield for investment properties

Quick Answer:A $300,000 property renting for $2,200/month has a gross rental yield of 8.8% and a net yield of approximately 6.1% after typical expenses in 2026. Properties with net yields above 5% are generally considered good investments.

Property Details

Insurance, tax, maintenance, management

Gross Rental Yield

Calculating... annual return

Net Yield

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Monthly Cash Flow

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Annual Cash Flow

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Price-to-Rent Ratio

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Visual Comparison

Effective Income --
Annual Expenses --

Expert Insight 2026 Pro Tip

In 2026, average gross rental yields in the U.S. range from 4% in expensive coastal cities to 10%+ in Midwest and Sun Belt markets. Net yield is the true measure — always subtract property tax, insurance, maintenance (budget 1% of property value), and vacancy losses. The price-to-rent ratio below 15 suggests buying is better than renting, while above 20 suggests renting may be smarter. Top-performing rental markets include Indianapolis, Memphis, and Cleveland with net yields often exceeding 7%.

Frequently Asked Questions About Rental Yield

What is a good rental yield in 2026?

In 2026, a good gross rental yield generally falls between 6% and 10%, while a strong net rental yield is typically above 5%. However, what counts as "good" depends heavily on location, property type, and your investment goals. In expensive coastal cities like San Francisco or New York, gross yields of 3-5% are common, while Midwest and Sun Belt markets such as Indianapolis, Memphis, and Cleveland often deliver gross yields of 8-12%. Net yield is the more meaningful figure because it accounts for operating expenses including property taxes, insurance, maintenance, and vacancy losses. A net yield above 7% is considered excellent and suggests strong cash flow potential, while anything below 3% may indicate the property is overvalued relative to its rental income.

How do I calculate net rental yield?

Net rental yield is calculated by subtracting all annual operating expenses from your annual rental income, dividing the result by the property's purchase price or current market value, and multiplying by 100 to get a percentage. The formula is: Net Yield = ((Annual Rent - Annual Expenses) / Property Value) x 100. Annual expenses should include property taxes, landlord insurance, routine maintenance and repairs (typically budgeted at 1% of property value per year), property management fees (usually 8-10% of rent), vacancy losses (commonly estimated at 5-8% of annual rent), and any HOA or condo fees. For example, a $300,000 property earning $26,400 in annual rent with $8,000 in expenses would have a net yield of approximately 6.13%. Always use conservative expense estimates to avoid overestimating your actual returns.

What is the price-to-rent ratio?

The price-to-rent ratio is a metric used to evaluate whether buying or renting a property makes more financial sense in a given market. It is calculated by dividing the property's purchase price by the total annual rent it generates: Price-to-Rent Ratio = Property Value / Annual Rent. A ratio below 15 generally suggests that buying is more favorable than renting, making it an attractive market for investors seeking rental income. A ratio between 15 and 20 is considered moderate, and investors should carefully analyze other factors before purchasing. A ratio above 20 indicates that property prices are high relative to rents, suggesting renting may be smarter for tenants and that investors may struggle to achieve positive cash flow. For example, a $300,000 property renting for $2,200 per month ($26,400 annually) has a price-to-rent ratio of about 11.4x, indicating a strong buying opportunity.

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