Rental Yield Calculator United States — Tax Year 2025

Calculate the gross and net rental yield on any property investment. For United States. Uses current Tax Year 2025 data.

Also available for:

🌍 Universal

Property value

Current market value of the property

Monthly rent received

Gross monthly rent from tenants

Annual expenses

Property tax, maintenance, insurance, vacancies (per year)

Rental Property Returns in the US — Cap Rates, Cash-on-Cash, and the 1% Rule

## The 1% rule A quick filter for US rental properties: monthly rent should be at least 1% of the purchase price. $200,000 property → $2,000/month rent. This rule has become very hard to meet in coastal markets but still applies in the midwest and southeast. ## Cap rate (2024 context) At 7% mortgage rates, a cap rate below 7% means negative cash flow if financed. Good markets for cash-flow positive rentals: Cleveland, Birmingham, Buffalo, Indianapolis — cap rates of 7–10%. Coastal markets (LA, NYC, SF): cap rates of 3–5% — investment depends entirely on appreciation. ## Cash-on-cash return More relevant than cap rate when using leverage: annual cash flow / down payment. A $30,000 down payment generating $3,000/year net cash = 10% cash-on-cash. Target 8–12% for a good investment. ## Short-term rentals (Airbnb) Short-term rentals can yield 2–3x long-term rental income in tourist/urban markets, but require more active management and are subject to increasingly strict local regulations.

Common questions — United States

What is a good rental yield in India?

Indian residential property yields are generally low: 2–3.5% gross in major cities. Tier 2 cities (Jaipur, Indore, Coimbatore) sometimes offer 4–5%. Commercial property (shops, offices) typically yields 5–9%. Compared to FD rates of 7–7.5%, residential rental yields in India are poor as pure income investments.

What is the difference between gross and net rental yield?

Gross yield: (Annual rent / Property value) × 100. Net yield: (Annual rent - All expenses) / Property value × 100. Expenses include: property tax (0.1–0.5% of property value), maintenance (0.5–1%), vacancy loss (typically 5–10% of annual rent), broker fees, insurance.

What is a cap rate?

Capitalisation rate (cap rate) is the net operating income divided by property value — essentially the same as net rental yield. Used more in commercial real estate. A cap rate of 7% means the property generates 7% of its value in net income annually. Higher cap rate = better income return (or higher risk).

Does rental income have tax implications in India?

Yes. Rental income is taxed as "Income from House Property." Standard deduction of 30% of Net Annual Value (rent - property tax) is allowed. Home loan interest is deductible up to ₹2 lakh for self-occupied; unlimited for let-out property (loss can be carried forward 8 years).

Should I buy a second property for rental income?

For most investors, the answer is no — unless the rental yield exceeds your loan rate and you have strong capital appreciation expectations. Equity mutual funds offer 10–12% with far better liquidity. Real estate makes more sense as a primary residence than as a rental investment in most Indian markets.

Rental Yield Calculator United States — Tax Year 2025

Rental Property Returns in the US — Cap Rates, Cash-on-Cash, and the 1% Rule

Common questions — United States

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