About the Real Estate Calculator
This real estate calculator gives you a fast first-pass read on an investment property by comparing its price against the rent it generates. It is a screening tool: it tells you within seconds whether a listing is worth a full analysis or not.
The formula
Gross yield = (monthly rent · 12) / purchase price · 100Gross yield is annual rent as a percentage of price, before any expenses. The rent-to-price ratio is the same relationship expressed monthly, which is where the well-known 1 percent rule comes from.
How to use this calculator
- 1Enter your Property Price ($). The field starts at
500000, which you can overwrite. - 2Enter your Monthly Rent ($). The field starts at
3000, which you can overwrite. - 3Read the result straight away — it recalculates as you type, so there is no button to press. Use Share to copy a link that reopens the page with your exact numbers filled in.
Worked example
| Input | Value |
|---|---|
| Property Price ($) | 500000 |
| Monthly Rent ($) | 3000 |
Result
Gross Rental Yield: 7.20%
Those are the values the page loads with, so you can reproduce this result yourself and then change one field at a time to see what drives the outcome.
Understanding your result
Gross yield ignores costs, so it always flatters a property. Its value is in comparison: it puts listings in different neighbourhoods and price brackets on one scale, so you can rank a shortlist quickly. It cannot tell you whether a deal is profitable.
Net yield is the figure that matters, and it lands well below gross once taxes, insurance, maintenance, management, and vacancy are deducted — commonly 35 to 45 percent of gross rent in total. A property showing an 8 percent gross yield may net closer to 4.5 percent, so treat gross yield as the filter and a full cash flow analysis as the decision.
Things worth knowing
- The 1 percent rule — monthly rent at or above 1 percent of price — is a screen, not a standard. Few properties in expensive markets meet it.
- High gross yields often signal higher risk: weaker tenant demand, older buildings, or areas with longer vacancies.
- Property tax rates vary enormously between jurisdictions and can swing net yield by a point or more.
- Verify the rent against actual comparable listings rather than the seller's projection.
- Yield ignores appreciation and leverage entirely. Two properties with identical yields can produce very different returns.
Frequently asked questions
What is a good rental yield?+
Gross yields of 8 percent or more are usually considered strong, 5 to 7 percent reasonable, and below 5 percent dependent on appreciation to justify. Norms vary widely by market.
What is the difference between gross and net yield?+
Gross yield is annual rent divided by price with no deductions. Net yield subtracts operating expenses first, and typically comes out 35 to 45 percent lower — it is the figure that reflects reality.
Does the 1 percent rule still work?+
As a quick filter, yes. As a requirement, it has become unrealistic in most high-cost US metros, where investors accept lower ratios in exchange for stronger appreciation and tenant quality.
How does a cap rate differ from yield?+
A cap rate uses net operating income rather than gross rent, so it accounts for expenses while still excluding financing. It is the more rigorous comparison measure between properties.