1. What is Gross Rental Yield?

Gross Rental Yield is a measure of annual rental income relative to property cost, expressed as a percentage. It helps investors evaluate the potential return on investment from rental properties.

2. How Does the Calculator Work?

The calculator uses the Gross Rental Yield formula:

Where:

• \( GRY \) — Gross Rental Yield (%)
• \( ARI \) — Annual Rental Income ($)
• \( PV \) — Property Value ($)

Explanation: The formula calculates the percentage return on investment by dividing annual rental income by property value and multiplying by 100.

3. Importance of Gross Rental Yield

Details: Gross Rental Yield is a key metric for real estate investors to compare different property investments, assess profitability, and make informed purchasing decisions.

4. Using the Calculator

Tips: Enter annual rental income and property value in dollars. Both values must be positive numbers to calculate a valid yield percentage.

5. Frequently Asked Questions (FAQ)

Q1: What is a good Gross Rental Yield?
A: Generally, a yield of 5-8% is considered good, but this varies by location and property type. Higher yields indicate better potential returns.

Q2: Does Gross Rental Yield include expenses?
A: No, Gross Rental Yield only considers rental income and property value. It does not account for expenses like maintenance, taxes, or insurance.

Q3: How is this different from Net Rental Yield?
A: Net Rental Yield subtracts all property-related expenses from the annual income before calculating the yield percentage.

Q4: Should I use market value or purchase price for property value?
A: For accurate current yield calculations, use the current market value. For investment analysis, use the purchase price to calculate actual return.

Q5: How often should I calculate Gross Rental Yield?
A: It's recommended to calculate yield annually or whenever there are significant changes in rental income or property value.