1. What is Rental Yield?

Rental yield is a percentage figure that calculates the return on investment you might anticipate from a rental property. It compares the annual rental income to the property value.

2. How Does the Calculator Work?

The calculator uses the rental yield formula:

Where:

• \( \text{Annual Rent} \) — Total yearly rental income ($)
• \( \text{Property Value} \) — Current market value or purchase price of the property ($)

Explanation: The equation shows what percentage of the property's value you earn back each year through rent.

3. Importance of Rental Yield Calculation

Details: Rental yield helps investors compare different property investments and assess their potential profitability before purchasing.

4. Using the Calculator

Tips: Enter the expected annual rental income and property value in dollars. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a good rental yield?
A: Generally, 5-8% is considered good, but this varies by location and property type.

Q2: Should I use purchase price or current value?
A: For investment analysis, use purchase price. For portfolio assessment, use current value.

Q3: Does this include expenses?
A: No, this is gross yield. Net yield would deduct expenses like maintenance and taxes.

Q4: How does this differ from ROI?
A: ROI considers total profit including appreciation, while yield only looks at rental income.

Q5: Should I consider other factors?
A: Yes, also consider location, property condition, vacancy rates, and potential for capital growth.