1. What is Rental Yield?

Rental Yield is a key metric used in real estate to evaluate the profitability of buy-to-rent investments. It represents the annual return on investment from rental income before expenses, expressed as a percentage of the property value.

2. How Does the Calculator Work?

The calculator uses the Rental Yield formula:

Where:

• Annual Rent — Total expected rental income for one year
• Property Value — Current market value or purchase price of the property

Explanation: The formula calculates what percentage of the property's value is earned back each year through rental income.

3. Importance of Rental Yield Calculation

Details: Rental yield helps investors compare different properties, assess investment potential, and make informed decisions about property purchases.

4. Using the Calculator

Tips: Enter the expected annual rental income and property value in your local currency. 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. Higher yields often indicate higher risk areas.

Q2: Should I use gross or net rental yield?
A: This calculator shows gross yield. For net yield, subtract annual expenses from the rent before calculating.

Q3: How does rental yield differ from ROI?
A: Yield only considers rental income vs property value, while ROI accounts for all costs, appreciation, and financing.

Q4: Does rental yield include property appreciation?
A: No, yield only measures income return. Total return would include both yield and appreciation.

Q5: How often should I recalculate rental yield?
A: Recalculate whenever rental income changes significantly or property value changes by more than 10%.