Gross rental yield = (Annual rental income ÷ Property purchase price) × 100
Annual rental income = Monthly rent × 12
Net rental yield = [(Annual rental income − Annual expenses) ÷ Total property cost] × 100
Annual expenses = Property taxes + insurance + maintenance + management fees + vacancies + repairs + other costs
Total property cost = Purchase price + closing costs + renovation costs + legal fees + other acquisition costs
Use gross yield for a quick estimate
Use net yield for a more accurate return calculation
Compare the yield with similar properties in the area
Higher yield usually indicates better rental income relative to cost
Lower yield may indicate higher property price or higher expenses