Precision Utility
US Rental Yield
Calculator
US Avg Yield
6.5%
US Avg Cap Rate
5.2%
Work out the return on your US investment property in seconds. Enter the property value, monthly rent and annual expenses to see your gross yield, net yield (cap rate), annual rental income and net profit. Built for US property investors and landlords.
Property Details
Gross Rental Yield
8.0%
Gross Yield
8.0%
Net Yield
6.3%
Annual Rent
$24,000
Annual Profit
$19,000
Gross Yield
8.0%
Net Yield
6.3%
Annual Rent
$24,000
Annual Profit
$19,000
What is cap rate and how does it relate to rental yield?
Cap rate (capitalization rate) is the most widely used metric in US commercial and residential real estate investing. It measures the property's annual net operating income (NOI) as a percentage of its market value — which is effectively the same as net rental yield.
The formula is simple: Cap Rate = (Annual Rent - Annual Expenses) / Property Value x 100. A higher cap rate means a higher return relative to the purchase price, but it can also indicate higher risk or a less desirable location.
Gross rental yield, by contrast, ignores expenses entirely: Gross Yield = Annual Rent / Property Value x 100. It is useful for quick comparisons between properties, but net yield (cap rate) gives a more realistic picture of actual returns.
Average rental yields across US markets
Rental yields vary enormously across the United States. As a rough guide for 2025-26:
- High-yield markets (8-12%): Cleveland, Detroit, Memphis, Birmingham, Indianapolis — lower purchase prices with solid rent-to-price ratios
- Mid-yield markets (5-8%): Tampa, Atlanta, Dallas, Phoenix, Charlotte — balanced growth and income
- Low-yield markets (2-5%): San Francisco, New York, Los Angeles, Seattle — high property values suppress yield, but appreciation potential is stronger
These are gross yield ranges. After expenses, net yields will be 1.5-3 percentage points lower depending on property taxes, insurance costs and management fees in each market.
Common US landlord expenses to budget for
When calculating net rental yield, make sure you account for all recurring costs:
- Property taxes: Vary by state and county — typically 0.5% to 2.5% of property value annually. Texas and New Jersey are among the highest; Hawaii and Alabama among the lowest.
- Homeowner insurance: Budget $1,000-$3,000/year for a standard single-family rental. Flood and hurricane zones cost more.
- Property management: If you hire a manager, expect 8-10% of monthly rent plus a leasing fee (typically half to one month's rent per new tenant).
- Maintenance and repairs: A common rule of thumb is 1-2% of property value per year, or set aside 10% of annual rent.
- Vacancy allowance: Budget 5-8% of annual rent to cover months between tenants.
- HOA fees: If applicable, these can range from $100 to $500+ per month for condos and townhouses.
Enter your total estimated annual expenses into the calculator above. The more accurate your expense estimate, the more useful your net yield figure will be.
How to improve your rental yield
There are two levers to increase yield: raise income or reduce costs. Practical strategies include:
- Buy below market value: Foreclosures, distressed sales and off-market deals lower your cost basis and instantly boost yield
- Add value through renovation: Kitchen and bathroom upgrades can justify higher rents. A $10,000 renovation that adds $200/month in rent pays for itself in just over 4 years
- Self-manage: Cutting out the 8-10% management fee goes straight to your bottom line — if you have the time and skills
- Reduce vacancy: Screen tenants carefully, maintain the property well, and price rent competitively to keep occupancy high
- Appeal property tax assessments: Many investors overpay on property taxes. If your assessed value seems too high, file an appeal with your county assessor
Use this calculator to model different scenarios — adjust rent, expenses and purchase price to see how each change affects your yield.
Frequently asked questions
What is rental yield?
Rental yield is the annual return on a property investment expressed as a percentage. Gross yield uses total rent divided by property value. Net yield subtracts expenses like taxes, insurance, maintenance and vacancies before dividing.
What is a good rental yield in the US?
Most US investors target a gross yield of 6-10% and a net yield of 4-7%. Yields vary hugely by market — Midwest cities often deliver higher percentages while coastal metros like San Francisco or New York sit lower but may offer stronger appreciation.
What is the difference between rental yield and cap rate?
Cap rate (capitalization rate) is essentially the same as net rental yield — annual net operating income divided by property value. Rental yield can refer to either gross or net. In US real estate, "cap rate" is the more common term for the net figure.
What expenses should I include when calculating net yield?
Common expenses include property taxes, homeowner insurance, HOA fees, property management (typically 8-10% of rent), maintenance and repairs (budget 1-2% of property value), vacancy allowance (5-8%), and any utility costs the landlord covers.
How do I calculate rental yield?
Gross yield = (monthly rent x 12) / property value x 100. Net yield = ((monthly rent x 12) - annual expenses) / property value x 100. Enter your figures into the calculator above for instant results.
Does rental yield include mortgage payments?
No. Rental yield and cap rate measure the property's return independent of how it is financed. Mortgage payments are a financing cost, not an operating expense. To assess leveraged returns, you would calculate cash-on-cash return instead.
What US cities have the highest rental yields?
As of 2025-26, cities like Cleveland, Detroit, Memphis, Indianapolis and Birmingham tend to offer higher gross yields (8-12%) due to lower property prices. However, higher yields can come with higher risk and lower appreciation potential.