Rental Property Yield Calculator (Gross Yield, Net Yield, Cash Flow)
Enter the purchase price, rent, expenses and loan terms to estimate the gross yield, net yield (NOI yield) and cash flow after the mortgage payment. The loan payment uses the same level-payment formula as the Loan & Revolving Payment Calculator. This is a rough estimate, not investment advice. For a home loan, see also the Mortgage Prepayment Calculator.
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Property and rental income
Expenses and purchase costs
Down payment and loan
The loan is assumed to cover price plus closing costs minus your own funds. If your funds cover the total, no loan is used.
Notes
- This is a rough estimate. It does not guarantee future income or property value and is not investment, tax or lending advice. Consult a real estate agent, lender or tax adviser before deciding.
- Gross yield is annual rent at full occupancy divided by the price. Net yield is NOI (rent after vacancy and operating expenses) divided by the price plus closing costs.
- Cash flow is NOI minus the annual level-payment loan repayment. The interest rate is assumed fixed for the whole term, and income tax, depreciation, major renovations and sale gains or losses are not included.
- DSCR is NOI divided by the annual loan payment. A value below 1 means the rent alone does not cover the loan. Lenders watch this figure, but their thresholds differ.
- The income and loan figures you enter are processed only in your browser.
Glossary
Gross yield
Annual rent at full occupancy divided by the purchase price. It ignores vacancy and expenses, so it is mainly a quick way to compare properties.
Net yield
NOI divided by the purchase price plus closing costs. NOI is rent after vacancy, management, repairs, taxes and other costs. It is usually lower than the gross yield.
NOI (net operating income)
Rental income minus operating expenses. Loan payments and income tax are not included.
Cash flow
Here, NOI minus the loan payment: the money actually left each year or month. A negative figure means you pay out of pocket.
FAQ
What is the difference between gross yield and net yield?
Gross yield is just annual rent at full occupancy divided by the price. Net yield divides NOI, which is rent after vacancy, management, repairs and taxes, by the price plus closing costs, so it is normally lower.
How much should I allow for closing costs?
Agent fees, registration, acquisition tax, loan fees and insurance often come to around 6 to 10% of the price for a resale property in Japan. It varies widely, so enter the figure from your actual quote.
What does negative cash flow mean?
After expenses and the loan payment, you pay out of pocket every month. It tends to worsen with vacancies or rate increases, so some people try a higher vacancy rate to see how much margin they have.
How is the loan payment calculated?
The loan is price plus closing costs minus your own funds, repaid in level monthly payments at a fixed rate. Bonus payments, variable-rate resets and prepayments are not modeled.
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