Underwrite
Rental yield calculator: gross vs net in plain numbers
Yield is the UK/Aus-flavored cousin of US cap talk - same instinct, different labels. Gross yield uses rent over price; net yield pulls expenses (and sometimes vacancy) into the numerator. Enter price, rent, and costs; see both so a listing's "8% yield" can't hide a fat OpEx pile.
Assumptions
Returns stack
- Gross yield
- —
- Net yield
- —
- Annual rent
- —
When to use
Reading overseas blogs or pro formas that say "yield"; comparing two prices with the same rent; checking whether "gross" was quietly sold as "net."
When not to
Don't use yield as cash-on-cash - no mortgage is in this math. And don't buy on gross yield alone when OpEx is heavy.
Assumptions: Gross yield uses rent over price only. Net yield subtracts operating expenses and optional vacancy - mortgage and income tax are excluded.
Worked examples
Input
Price $400,000 Rent $2,400/mo
Output
Gross yield 7.2%
Gross ignores expenses - never buy on gross alone.
Input
Same · OpEx $10,000/yr Vacancy 5%
Output
Net yield ≈ 5.0%
Net yield is the unlevered cousin of cap rate when vacancy is included.
Common traps
- Gross yield ignores expenses - never buy on gross alone.
- Don't mix monthly rent into an annual formula.
- Yield is not cash-on-cash - no loan in yield here.