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Rental Yield Calculator

Calculate gross and net rental yield on investment properties. Factor in expenses, vacancy, and management fees.

Property & Purchase Details

Purchase Price

Down Payment

Closing Costs

Renovation Costs

Upfront rehab or repairs

Income & Expenses

Monthly Rent

Vacancy Rate

Typical: 5-10%

Property Management Fee

% of collected rent

Monthly Insurance

Monthly Property Tax

Monthly Maintenance

Repairs, landscaping, etc.

Monthly HOA

Monthly Other Expenses

Financing & Growth

Mortgage Interest Rate

Loan Term

Annual Appreciation Rate

Expected annual property value increase

Understanding Rental Property Returns: Cap Rate vs. Cash-on-Cash

Evaluating a rental property investment requires looking at several different return metrics, each telling you something different about the deal. The two most important are the cap rate and the cash-on-cash return.

What Is Cap Rate?

The capitalization rate (cap rate) measures a property's return independent of financing. It is calculated as:

Cap Rate = Net Operating Income (NOI) ÷ Purchase Price

A higher cap rate means a higher return relative to the property price. Cap rates typically range from 4% to 10% depending on the market, property type, and risk level. A 5-6% cap rate is common in stable metropolitan areas, while 8-10% may be found in higher-risk or secondary markets.

What Is Cash-on-Cash Return?

Cash-on-cash return measures the annual return on the actual cash you invested (down payment, closing costs, renovation). Unlike cap rate, it accounts for mortgage leverage:

Cash-on-Cash = (NOI - Annual Mortgage Payments) ÷ Total Cash Invested

Because leverage amplifies returns, your cash-on-cash return can be significantly higher or lower than the cap rate. A good cash-on-cash return for a rental property is generally 8-12% or higher.

What Makes a Good Rental Investment?

Positive cash flow: The property should produce income after all expenses and mortgage payments. Even a small positive cash flow means the property is self-sustaining.
The 1% rule: A quick screening rule says monthly rent should be at least 1% of the purchase price. A $200,000 property should rent for at least $2,000/month.
Cap rate above 5%: While market-dependent, a cap rate above 5% generally indicates a reasonable return.
Location fundamentals: Population growth, job market, school quality, and crime rates all affect long-term appreciation and rental demand.
Built-in equity: Buying below market value or adding value through renovation creates immediate return.

Do Not Forget These Hidden Costs

New investors often underestimate vacancy (budget 5-10% of gross rent), maintenance (1% of property value per year is a common rule), and capital expenditures (roof, HVAC, appliances that need replacement every 10-20 years). Property management fees of 8-12% are another significant cost if you do not plan to self-manage.

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How to Use the Rental Yield Calculator

1
Enter your values
Open the Rental Yield Calculator and fill in the required input fields with your numbers or selections.
2
Review the calculation
The tool automatically computes the result as you type. Double-check your inputs to ensure accuracy.
3
Interpret your results
Review the calculated output along with any breakdowns, charts, or explanations provided to understand what the numbers mean for your situation.

Sources & Verification

Based on standard mortgage and real estate industry formulas

Freddie Mac Primary Mortgage Market Survey U.S. Census Bureau Housing Vacancy Survey

Published by ConvertCrunch Editorial Team | Our Methodology

Frequently Asked Questions

What is the Rental Yield Calculator?

The Rental Yield Calculator is a free browser-based tool on ConvertCrunch. Calculate gross and net rental yield on investment properties. Factor in expenses, vacancy, and management fees. It requires no downloads, installations, or account signups. Simply enter your values and get instant, accurate results. The tool is designed for quick calculations and informed decision-making, whether you are a professional, student, or everyday user looking for reliable answers.

How do I use the Rental Yield Calculator?

Using the Rental Yield Calculator is straightforward. Enter your values into the input fields provided on the page, then calculate or adjust parameters to explore scenarios. Most processing happens locally in your browser. If a feature uses a third-party service, the tool identifies that connection and the privacy policy explains it. Most users get the answers they need in under a minute.

Is the Rental Yield Calculator free to use?

Yes, the Rental Yield Calculator is completely free to use with no account signup, email requirement, or premium tier. Most calculations run locally in your browser. Features that depend on live data or a third-party service require a network connection and are identified in the tool. You can use it as many times as you need for personal, educational, or professional purposes.

How accurate is the Rental Yield Calculator?

The Rental Yield Calculator uses standard mortgage and real estate formulas along with current market data where applicable. Actual costs may vary based on your lender, credit score, location, property type, and current market conditions. Results are estimates for planning and comparison purposes. Always obtain official quotes from lenders and consult with real estate professionals for decisions involving property purchases or financing.

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