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Real Estate Investment Calculator: Estimate Rental Income & Gross Yield Instantly
The Real Estate Investment Calculator helps you quickly evaluate a property’s earning potential. Enter the purchase price, expected monthly rent, and property type to see monthly/annual rental income and gross rental yield—perfect for quick comparisons and first-pass due diligence.
1) What the Calculator Does
This tool turns a few basic assumptions into an at-a-glance snapshot of potential returns. It annualizes the rent you expect to collect and compares it to the property price to produce a gross rental yield. Use it to shortlist deals, sanity-check asking prices, and benchmark properties across markets or property types.
2) Inputs
| Input | Description |
|---|---|
| Property Price | Total purchase price of the property (including the amount you expect to pay at closing). |
| Monthly Rental Income | Your expected rent collected per month based on comps, current leases, or pro-forma assumptions. |
| Property Type | Select Single-Family, Multi-Family, or Apartment to align with your scenario. (Displayed for clarity; it does not change the math in this simple gross-yield version.) |
3) How It Works (Formula)
The calculator applies straightforward arithmetic:
Annual Rental Income = Monthly Rental Income × 12
Gross Rental Yield (%) = (Annual Rental Income ÷ Property Price) × 100
Variables: Monthly Rental Income = expected rent per month; Annual Rental Income = yearly rent; Property Price = purchase price; Gross Rental Yield = income-to-price ratio before expenses.
4) Outputs
| Output | What It Means |
|---|---|
| Monthly Rental Income | Projected rent collected each month. Useful for cash-flow planning and mortgage coverage checks. |
| Annual Rental Income | Monthly rent annualized (rent × 12) to aid year-over-year comparisons. |
| Gross Rental Yield (%) | Annual income divided by purchase price. A fast, apples-to-apples way to compare properties and markets. |
5) Practical Use Cases
- Deal screening: Rapidly rank listings by gross yield to focus due diligence on leaders.
- Price negotiations: Test how price changes affect yield and your target return thresholds.
- Market comparison: Compare neighborhoods or cities using the same rent/price logic.
- Portfolio planning: Check whether new purchases align with yield goals and cash-flow needs.
- Lender conversations: Share clear income assumptions during pre-approval and underwriting talks.
6) Frequently Asked Questions
What is a “good” gross rental yield?
It depends on your market, risk tolerance, and financing costs. Many investors aim for a yield that comfortably exceeds their blended cost of capital and expected expenses. Use this tool for quick screening, then model net yield after expenses to make a decision.
What’s the difference between gross yield and net yield?
Gross yield ignores expenses. Net yield subtracts ongoing costs such as taxes, insurance, maintenance, HOA, utilities (if landlord-paid), vacancy, property management, and financing. Net yield is better for profitability; gross yield is best for fast comparisons.
Does property type change the calculation?
In this simplified version, the math is the same for single-family, multi-family, and apartments. Property type is shown for clarity and reporting. For deeper analysis, expand the model to include unit counts, vacancy assumptions, and operating expenses.
How should I estimate monthly rent?
Use recent comparable rentals, current leases, or third-party rental estimates. Apply a vacancy/credit loss assumption in your separate underwriting if you move beyond gross yield.
Can I include mortgage payments and expenses?
This tool focuses on gross yield. For cash-flow analysis, layer in mortgage principal & interest, taxes, insurance, HOA, maintenance, management fees, CapEx reserves, and vacancy to estimate net operating income and cash-on-cash return.
Is gross yield enough to make a buy decision?
No. Treat it as the first filter. If a property passes your gross-yield hurdle, perform full due diligence including inspection, expense underwriting, financing terms, and local regulations.
