To calculate rental yield in 2025, you need to determine the annual rental income and divide it by the property's purchase price or current market value, then multiply by 100 to get a percentage. Both gross and net rental yields can be calculated, with net yield accounting for expenses.
Calculating rental yield in 2025 involves understanding two main types: gross and net rental yield. According to the Rental Yield Calculator [1], the gross rental yield is calculated by dividing the annual rental income by the property's purchase price or current market value, then multiplying by 100 to express it as a percentage:
- Gross Rental Yield = (Annual Rental Income / Property Price) x 100
For example, if a property is valued at $300,000 and generates $18,000 annually in rent, the gross yield would be:
($18,000 / $300,000) x 100 = 6%
Net rental yield takes into account expenses such as maintenance, property management, taxes, and insurance. The Westpac guide [3] emphasizes subtracting these costs from gross income before dividing by the property value:
- Net Rental Yield = (Annual Rental Income - Expenses) / Property Price x 100
Using online calculators like those from ING [2] and India's Rental Yield Calculator [4], investors can input specific data to estimate potential yields, which is especially useful for planning investments in 2025. It’s important to note that these calculators often update their algorithms to reflect current market conditions, so always use the latest data for accuracy.
In summary, calculating rental yield involves dividing annual rental income by