Smart Rental Property Investment Analysis

Gross yield is calculated by dividing the annual rental income by the property value, showing the basic return before expenses. Net yield takes into account all operating expenses (taxes, insurance, maintenance, etc.) and provides a more accurate picture of your actual return on investment. Our calculator provides both metrics so you can understand both the gross potential and net profitability of a property.

The accuracy depends entirely on the numbers you input. Our calculator uses standard real estate investment formulas to process your data. For the most accurate results, research local market conditions thoroughly to ensure your rent estimates, vacancy rates, and expense figures are realistic. Many investors consult with local property managers for expense estimates.

This varies by market and investment strategy. Generally, a gross yield of 8-12% is considered good for residential properties, while net yields of 5-8% are typically desirable. However, in high-appreciation markets, investors sometimes accept lower yields for long-term capital growth. Our blog has articles that explore yield expectations in different markets and property types.

Our calculator focuses on property fundamentals rather than financing, so mortgage payments aren't included in the yield calculations. This allows you to compare properties objectively regardless of financing method. However, you can add mortgage payments to "Other Expenses" if you want to see their impact on cash flow. Many investors run scenarios both with and without financing to understand both perspectives.

A common rule of thumb is to budget 1-2% of the property value annually for maintenance. For older properties or those in need of repairs, you may need to budget more. It's also wise to set aside additional funds for capital expenditures (roof, HVAC replacement, etc.). Our "Hidden Costs of Rental Property Ownership" blog post provides detailed guidance on estimating these expenses.

Vacancy rates vary by location and property type. In strong rental markets, 5-7% is typical. For less desirable areas or properties, 8-10% might be more appropriate. Research local market reports or consult property managers in the area. Our calculator lets you adjust this rate to test different scenarios—we recommend running both conservative and optimistic estimates.

Currently, our calculator doesn't have a save feature, but you can take screenshots or note down the results to compare different properties. Many investors create spreadsheets with multiple scenarios using our calculator's outputs. We're working on adding account features that will allow saving and comparing calculations—sign up for our newsletter to be notified when this launches.

Our calculator was designed by real estate investors who found most tools either too simplistic or overly complex. We strike the perfect balance—including all essential variables without unnecessary complexity. Unlike many calculators, we account for buying costs in your total investment and provide both gross and net yield metrics. The clean interface makes it easy to use while still providing professional-grade analysis.

While primarily designed for residential rentals, the calculator can provide preliminary analysis for small commercial properties. However, commercial real estate often involves different expense structures (NNN leases, percentage rents, etc.) and longer vacancy periods. We recommend using our tool for initial screening but consulting commercial-specific resources for detailed analysis.

The calculator works with any currency—just be consistent with your inputs. However, tax structures, legal fees, and typical expense ratios vary significantly by country. The core yield calculations will be accurate, but you'll need to research local norms for expenses and vacancy rates. Our methodology is based on principles that apply globally, but local market knowledge is essential for accurate results.