Net yield on a property: how to calculate it correctly
Net yield shows what a property really produces after deducting purchase, financing and rental costs.
Calculate my net yieldThe difference between gross and net yield
Gross yield divides annual rent by the purchase price. It is useful for a first estimate, but it can overstate an opportunity. Net yield subtracts the costs that reduce cash flow and gives you a more realistic view.
Costs you should include
- Taxes, legal fees, registry and other acquisition costs
- Interest, insurance and mortgage-related costs
- Property tax, community fees, maintenance and management
- Vacancies, missed payments and repairs
- Taxation applicable to rental income
How to calculate it step by step
- Add the realistic annual rental income.
- Calculate annual costs and the total investment cost.
- Subtract costs and taxes from income.
- Divide net income by total invested capital and multiply by 100.
Frequently asked questions about net yield
Does net yield include the mortgage?
To understand the money left each month, consider financing costs and separate cash flow from the asset's yield. USELIUM shows both perspectives to avoid confusion.
What is a good net yield on a property?
It depends on risk, location, financing, liquidity and available alternatives. There is no universal percentage: compare deals using the same assumptions and costs.
Can I calculate net yield for free?
Yes. USELIUM's real-estate calculator is free and lets you review yield, cash flow, ROI and break-even point.
Calculate my net yield
Net yield shows what a property really produces after deducting purchase, financing and rental costs.
Calculate my net yield