Gross Rental Yield Calculator: Annual Rent Over Property Price
Work out a rental property's gross yield — the headline percentage that compares rent against price before any costs are taken out.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Gross rental yield | Non-yield share |
|---|---|---|
| $24k rent · $400k price | 6.00% | 94.00% |
| $18k rent · $300k price | 6.00% | 94.00% |
| $60k rent · $1.2M price | 5.00% | 95.00% |
| $10k rent · $200k price | 5.00% | 95.00% |
How This Calculator Works
Enter annual gross rent and the property price. The calculator divides one by the other and multiplies by 100 to give the gross rental yield — the first-pass figure landlords use to screen properties before running the full underwriting.
The Formula
Part as a Percentage of a Whole
Part is the portion, Whole is the total it belongs to
Worked Example
A property collecting $24,000 a year on a $400,000 price tag posts a 6% gross rental yield. After taxes, insurance, vacancy, maintenance, and management, the net yield (cap rate) is usually 1.5 to 2.5 percentage points lower — a 6% gross typically becomes a 3.5% to 4.5% net.
Key Insight
Gross yield is for quick screening, not for buying decisions. Two properties with identical 6% gross yields can have very different net yields once operating costs are subtracted — high-tax markets, older buildings, and high-management-fee markets all chew into the gross. Use gross yield to shortlist; use cap rate to choose.
Gross to net — where the yield actually goes
A 10% gross yield doesn't mean 10% in your pocket. Typical expense load on a U.S. residential rental: property taxes 1-3% of property value annually; insurance 0.3-0.6%; maintenance reserve 1-2%; property management 8-10% of rents (10-15% with leasing); vacancy reserve 5-8% of rents; utilities/HOA/landscaping varies. Total expenses typically 30-50% of gross rents.
Apply to a $200K property at 8% gross yield ($16K rent): expenses might be $6K-$8K → NOI $8K-$10K → 4-5% net yield (cap rate). After debt service on a $150K mortgage at 7% interest (~$12K/year), cash flow is negative. The 8% headline gross yield produced a money-losing deal at modern interest rates.
For new real estate investors: focus on cap rate (NOI / purchase price) and cash-on-cash (after-debt cash / cash invested) rather than gross yield. Gross yield is useful only as a screening tool to quickly filter properties — actual underwriting requires line-by-line expense modeling. The '50% rule' shortcut (assume 50% of rent goes to expenses ex-debt-service) is conservative but useful for first-pass screening.
Why gross yield is highest in declining areas
Markets with the HIGHEST gross yields are typically markets with the LOWEST appreciation expectations and HIGHEST operational challenges. Detroit, Cleveland, Memphis can show 15-25% gross yields — far above coastal cities at 4-6%. Why doesn't all real estate capital flow to high-yield markets?
Because the high gross yield masks high underlying risk and operational intensity. Detroit Class C properties: high tenant turnover; collection challenges; higher maintenance cost per dollar of rent; declining property values offset rental income; specialized property management required. Net returns are much closer to coastal-market returns than gross yield suggests.
The 'efficient market' in real estate broadly equilibrates risk-adjusted returns across markets. Sustained outsized returns require either: (a) operational expertise beyond market average (value-add specialists in distressed properties); (b) information advantage (local market knowledge unavailable to outside capital); (c) acceptance of risks others can't underwrite (small operators with personal management can underwrite tenant quality issues large institutions can't). Average investors underwriting on gross yield alone consistently underperform — the high gross yield is compensation for risk and work they may not have priced correctly.
U.S. gross rental yield by market (Zillow / ApartmentList 2024)
Reference gross rental yields for major U.S. markets. After expenses (typically 30-50% of rents) and debt service, net cash-on-cash is much lower.
| Market | Median home price | Median annual rent | Gross yield |
|---|---|---|---|
| San Jose, CA | $1.5M | $45K | 3.0% |
| San Francisco, CA | $1.2M | $42K | 3.5% |
| Los Angeles, CA | $950K | $36K | 3.8% |
| NYC (outer boroughs) | $700K | $36K | 5.1% |
| Boston, MA | $700K | $32K | 4.6% |
| Seattle, WA | $800K | $36K | 4.5% |
| Atlanta, GA | $400K | $22K | 5.5% |
| Charlotte, NC | $390K | $22K | 5.6% |
| Phoenix, AZ | $430K | $24K | 5.6% |
| Houston, TX | $300K | $22K | 7.3% |
| Indianapolis, IN | $240K | $18K | 7.5% |
| Memphis, TN | $190K | $17K | 8.9% |
| Cleveland, OH | $170K | $15K | 8.8% |
| Detroit, MI | $140K | $15K | 10.7% |
Median yields are above-class-A given the median home includes lower-quality properties. Class A new construction in same markets has 1-2 percentage point lower gross yields. After expenses and debt service, net cash-on-cash typically 30-50% of gross yield — making coastal markets cash-flow negative and Midwest markets producing 4-8% cash-on-cash.
Frequently Asked Questions
How is gross rental yield calculated?
Divide annual gross rent by the property price, then multiply by 100. $24,000 of rent on a $400,000 property is a 6% gross yield.
What is the difference between gross yield and cap rate?
Gross yield uses gross rent. Cap rate uses net operating income — gross rent minus operating expenses. Cap rate is the more honest figure for buying decisions; gross yield is faster for screening.
What is a good gross rental yield?
Residential rentals in US markets commonly run 5% to 9% gross. Supply-constrained metros run lower because price growth absorbs the yield; weaker markets run higher with more operating risk.
Should I use purchase price or current value?
Use whichever fits the question. Purchase-price yield reflects what you actually paid; current-value yield reflects today's market and is what a potential buyer would see.
Does gross yield include vacancy?
No — gross yield assumes 100% occupancy. Real-world vacancy reduces actual rent collected and is one of the reasons net yield ends up below gross.
When is this calculator unreliable?
As a profitability measure — gross yield ignores ALL expenses (property taxes, insurance, maintenance, vacancy, management, debt service). True net yield (cash-on-cash) is typically 30-50% of gross yield after expenses. Use gross yield only for quick screening; underwrite real cap rate (NOI/price) and cash-on-cash for actual investment decisions.
References & Authoritative Sources
- Zillow Research — U.S. Rent and Home Price Indexes · consulted June 1, 2026 · Authoritative U.S. residential rent and price data
- Federal Reserve Economic Data (FRED) — Case-Shiller National Home Price Index · consulted June 1, 2026 · Official U.S. home price index
- ApartmentList — U.S. Rent Reports · consulted June 1, 2026 · Industry source for U.S. rental market trends
Related Calculators
Data Sources & Benchmarks
This calculator draws on 1 independent, dated source.
Embed this calculator
Add this calculator to your website for your readers. The embed includes a neutral attribution link to the original CalcDomain page for methodology, updates, and source notes.
Attribution uses rel="nofollow" by default and is included for transparency, not ranking manipulation.
Suggest an improvement
Found a calculation issue, outdated source, unclear assumption, or missing edge case? Send a short note so we can review it.
Methodology & Review
Gross rental yield equals annual gross rent / property purchase price × 100. The calculator returns the percentage. Gross yield is the simplest real estate yield metric — uses only top-line rent and price without subtracting any expenses. U.S. gross yields 2024: high-cost coastal markets 4-6%; mid-market metros 7-10%; low-cost cash-flow markets 12-18%+. Gross yield is useful for quick screening (sorting properties by potential before deeper analysis) but is NOT a profitability measure since it ignores all costs. RELIABILITY: Useful only for quick screening. Unreliable as a profitability measure because it ignores all expenses (property taxes, insurance, maintenance, vacancy, management, debt service). True cash-on-cash and cap rate are much lower than gross yield — typically 50-65% of gross yield after expenses. Treating gross yield as profitability indicator is a common new-investor mistake.
Reviewed according to the CalcDomain Editorial Policy & Calculator Methodology. We document formulas, edge cases, sources, update dates, and correction paths for calculator pages.
Updated