Gross rental yield calculator
Investors skim yield before digging into expenses—give them a fast answer on your site. Customize fields (HOA, vacancy) in Calclet when you need more depth.
Example scenario
An investor underwrites a turnkey duplex listed at four hundred twenty-five thousand dollars acquisition basis while market comps support twenty-four hundred dollars monthly gross scheduled rent on a long-term lease without seller concessions annualized. Multiplying rent by twelve yields twenty-eight thousand eight hundred dollars annual gross rental income before vacancy loss or operating expenses; dividing by purchase price produces roughly six point seven eight percent gross rental yield—useful for stacking deals against debt-service coverage screens before layering taxes, insurance, maintenance reserves, and property management fees into net operating income.
Gross rental yield calculator
Before expenses—quick deal screening
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How to calculate gross rental yield
- Input monthly rent ($) as gross scheduled rent from a signed lease or rent-roll pro forma—exclude projected short-term premiums unless that is your stabilized operating model.
- Input property price ($) aligned to total acquisition basis you compare across listings—purchase contract plus documented closing costs when your investor memo uses all-in basis.
- Read gross rental yield (annual) as twelve times monthly rent divided by price—duplicate scenarios with five percent haircut rent when underwriting vacancy during lease-up.
- Compare yields apples-to-apples across neighborhoods only after normalizing furnished versus unfurnished rents and utility reimbursement structures.
Gross yield context (market & asset-class dependent)
- Single-family rental gross yields across US metros
- Listing and investor surveys often quote wide dispersion—high-single-digit to low-double-digit gross yields appear in cash-flow-oriented markets while appreciation-heavy coastal metros frequently land lower on headline gross yield
- Gross yield versus net yield (cap rate)
- Net operating income yields subtract operating expenses and vacancy—net figures typically sit materially below gross rental yield on the same rent roll
- Leverage and debt-service coverage
- Positive gross yield does not imply cash-flow-positive leverage—01 compare principal-and-interest payments and lender minimum DSCR requirements separately
Best use cases
- Forecasting and scenario planning
- Client education and pre-qualification
- Budget and performance decision support
Frequently asked questions
Should property price include renovation capex before stabilization?
Yes when your denominator reflects total capital deployed to achieve the stated rent. Mixing as-is purchase price with post-rehab rent inflates gross yield unless you add rehab dollars into price.
Does gross rental yield use effective gross income after vacancy?
No—this headline metric uses contract rent annualized. Effective gross income multipliers belong in net yield or capitalization-rate worksheets after vacancy and collection loss.
Why might my lender’s debt-service ratio disagree with six point seven eight percent gross yield?
Underwriters stress lower stabilized rent, higher expenses, and amortizing debt payments—gross yield ignores P&I entirely so cash-on-cash outcomes diverge.
Can I use HOA dues or property taxes inside gross rental yield?
Not in this formula—those flow through operating expense lines when computing net operating income. Track them separately when comparing condos versus fee-simple houses.
Glossary
Scenario modeling
Testing multiple assumptions to estimate possible outcomes before execution.
Commercial intent
User behavior indicating readiness to buy, subscribe, or request a quote.
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Category: Residential real estate investingTopics: Gross rental yield, Buy-and-hold underwriting, Cap rate screening
Last reviewed: 2026-05-07
Reviewed by: Calclet Growth Team