Rental Yield
Rental Yield Calculator
Estimate gross and net rental yield using your own property value, rental income and annual costs.
Your estimate.
Enter the property value and annual rent to see an estimate.
Inputs
What you control.
- Property value and annual rent are required.
- Acquisition costs are added to the capital basis for net yield.
- Service charges, maintenance, management, insurance and other costs are annual amounts.
- Vacancy can be entered from 0% to 100%.
Results
What this calculates.
- Gross yield compares rent with property value before costs.
- Net yield compares net rental income with property value plus acquisition costs.
- The result also shows rent, costs, vacancy, net income and capital basis for transparency.
- Yield is not the same as total investment return or ROI.
Formula and methodology
How the estimate is produced.
Gross yield = annual rent ÷ property value × 100.
Vacancy cost = annual rent × vacancy rate ÷ 100.
Annual operating costs = service charges + maintenance + management fees + insurance + other annual costs + vacancy cost.
Net rental income = annual rent − annual operating costs.
Total capital basis = property value + acquisition costs.
Net yield = net rental income ÷ total capital basis × 100.
Assumptions
Rules and values used.
- System assumptions: None required for the core rental-yield formula.
- Every figure comes from the user; there are no hidden market-rate assumptions.
- Optional costs begin at zero and should be replaced with figures relevant to the property.
- Vacancy is modelled as a percentage reduction in annual rent.
- Acquisition costs increase the capital basis used for net yield.
Important limitations
How to use the result.
- The estimate does not forecast rent, property value or future expenses.
- It does not calculate capital appreciation, resale profit, total investment ROI, financing return, tax outcomes or IRR.
- A negative net result is retained because costs can exceed rental income.
Results are estimates based only on the values entered. Rental income, vacancy, service charges, maintenance and other costs can change over time. This calculator does not provide investment, financial, tax or legal advice.
Example calculation
The method in context.
Illustrative example
For a property value of AED 1,000,000, annual rent of AED 80,000 and acquisition costs of AED 40,000, with AED 20,000 in annual property costs and 5% vacancy:
- Vacancy cost
- AED 4,000
- Annual operating costs
- AED 24,000
- Net rental income
- AED 56,000
- Total capital basis
- AED 1,040,000
- Gross yield
- 8.00%
- Net yield
- 5.38%
Commercial context