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Net Rental Yield Calculator

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Important Formulas of Mortgage and Real Estate

✖Annual Rental Income refers to the total amount of rental revenue that a property generates over the course of one year.ⓘ Annual Rental Income [ARI]			+10% -10%
✖Annual Expenses refer to the total costs incurred over a year for maintaining and operating a property or business.ⓘ Annual Expenses [AE]			+10% -10%
✖Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time.ⓘ Property Value [PV]			+10% -10%

✖Net Rental Yield is the annual rental income generated from a property after subtracting expenses, expressed as a percentage of the property's cost.ⓘ Net Rental Yield [NRY]

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Formula

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Net Rental Yield

Formula

NRY = ((ARI - AE) \cdot (\frac{1}{PV})) \cdot 100

Example

4.065818 = ((50000 - 33000) \cdot (\frac{1}{418120})) \cdot 100

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Net Rental Yield Solution

STEP 0: Pre-Calculation Summary

Formula Used

Net Rental Yield = ((Annual Rental Income-Annual Expenses)*(1/Property Value))*100
NRY = ((ARI-AE)*(1/PV))*100
This formula uses 4 Variables

Variables Used

Net Rental Yield - Net Rental Yield is the annual rental income generated from a property after subtracting expenses, expressed as a percentage of the property's cost.
Annual Rental Income - Annual Rental Income refers to the total amount of rental revenue that a property generates over the course of one year.
Annual Expenses - Annual Expenses refer to the total costs incurred over a year for maintaining and operating a property or business.
Property Value - Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time.

STEP 1: Convert Input(s) to Base Unit

Annual Rental Income: 50000 --> No Conversion Required
Annual Expenses: 33000 --> No Conversion Required
Property Value: 418120 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

NRY = ((ARI-AE)*(1/PV))*100 --> ((50000-33000)*(1/418120))*100

Evaluating ... ...

NRY = 4.06581842533244

STEP 3: Convert Result to Output's Unit

4.06581842533244 --> No Conversion Required

FINAL ANSWER

4.06581842533244 ≈ 4.065818 <-- Net Rental Yield

(Calculation completed in 00.020 seconds)

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Credits

Created by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has created this Calculator and 100+ more calculators!

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IGNOU (IGNOU), India

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< Mortgage and Real Estate Calculators

Effective Gross Income

Go Effective Gross Income = Potential Gross Rental Income+Other Income-Allowances for Vacancies and Bad Debts

Cost Approach Appraisal

Go Property Value = Reproduction Cost-Depreciation+Value of Land

Vacancy Rate

Go Vacancy Rate = (Vacant Units in the Building*100)/Total Units in the Building

Gross Income Multiplier

Go Gross Income Multiplier = Property Sale Price/Effective Gross Income

Net Rental Yield Formula

Net Rental Yield = ((Annual Rental Income-Annual Expenses)*(1/Property Value))*100
NRY = ((ARI-AE)*(1/PV))*100

What is Net Rental Yield ?

Net rental yield is a vital metric in real estate investing, indicating the actual return on investment generated by a rental property after deducting all expenses from the rental income. This metric considers various costs like property taxes, maintenance, insurance, vacancies, and management fees. The formula for net rental yield involves subtracting total annual expenses from annual rental income and dividing the result by the property's total cost. A higher net rental yield signifies a more profitable investment, providing investors with a clearer understanding of the property's financial performance and helping them make informed decisions about investment strategies and property management.

How to Calculate Net Rental Yield?

Net Rental Yield calculator uses Net Rental Yield = ((Annual Rental Income-Annual Expenses)*(1/Property Value))*100 to calculate the Net Rental Yield, The Net Rental Yield is the annual rental income minus expenses, divided by the property's cost, expressed as a percentage. Net Rental Yield is denoted by NRY symbol.

How to calculate Net Rental Yield using this online calculator? To use this online calculator for Net Rental Yield, enter Annual Rental Income (ARI), Annual Expenses (AE) & Property Value (PV) and hit the calculate button. Here is how the Net Rental Yield calculation can be explained with given input values -> 4.065818 = ((50000-33000)*(1/418120))*100.

FAQ

What is Net Rental Yield?

The Net Rental Yield is the annual rental income minus expenses, divided by the property's cost, expressed as a percentage and is represented as NRY = ((ARI-AE)*(1/PV))*100 or Net Rental Yield = ((Annual Rental Income-Annual Expenses)*(1/Property Value))*100. Annual Rental Income refers to the total amount of rental revenue that a property generates over the course of one year, Annual Expenses refer to the total costs incurred over a year for maintaining and operating a property or business & Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time.

How to calculate Net Rental Yield?

The Net Rental Yield is the annual rental income minus expenses, divided by the property's cost, expressed as a percentage is calculated using Net Rental Yield = ((Annual Rental Income-Annual Expenses)*(1/Property Value))*100. To calculate Net Rental Yield, you need Annual Rental Income (ARI), Annual Expenses (AE) & Property Value (PV). With our tool, you need to enter the respective value for Annual Rental Income, Annual Expenses & Property Value and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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