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Rental Yield Calculator

Calculate the annual rental yield on a property.

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How to Calculate

Rental yield is a metric used to evaluate the profitability of rental income from a real estate investment. Gross yield = (Annual rental income ÷ Purchase price) × 100 Net yield = ((Annual rental income − Annual expenses) ÷ Purchase price) × 100 Investment yield = ((Annual rental income − Annual expenses) ÷ Actual investment) × 100 Actual investment = Purchase price − Tenant deposit. Expenses include management fees, maintenance, property tax, vacancy costs, etc.

Example

Example: Purchase price ₩500,000,000, Monthly rent ₩1,500,000, Monthly expenses ₩200,000, Deposit ₩50,000,000 Annual rental income = ₩1,500,000 × 12 = ₩18,000,000 Annual expenses = ₩200,000 × 12 = ₩2,400,000 Net annual income = ₩18,000,000 − ₩2,400,000 = ₩15,600,000 Gross yield = ₩18M ÷ ₩500M × 100 = 3.60% Net yield = ₩15.6M ÷ ₩500M × 100 = 3.12% Actual investment = ₩500M − ₩50M = ₩450,000,000 Investment yield = ₩15.6M ÷ ₩450M × 100 = 3.47%

FAQ

What is a good rental yield?
A net yield of 4–6% is generally considered good. However, it varies by location, property type, and market conditions. It is best to compare against bank deposit rates.
What is included in monthly expenses?
Property tax, comprehensive real estate tax, building management fees, maintenance, insurance, and estimated vacancy costs. Including all costs is important for accurate yield calculation.
Why is the deposit subtracted?
The tenant deposit effectively reduces the landlord's actual investment. Therefore, the deposit is subtracted when calculating the investment yield (return on actual funds invested).