Rental Yield

Compare rental income against the same property value in one currency. Monthly rent means the potential rent at full occupancy; operating costs are annual owner-paid costs, not tenant reimbursements.

Potential annual rent = 12 × monthly rent. Effective rent = potential annual rent × (100 − vacancy %) / 100. Annual operating surplus (NOI) = effective rent − operating costs. Net yield / cap rate = NOI / property value × 100; gross yield uses potential annual rent before vacancy and costs.

Gross rent multiplier = property value / potential annual rent. It is undefined at zero rent. It ignores vacancy, expenses and financing and is not a payback-time promise. Negative surplus and net yield indicate an operating loss.

Include relevant owner-paid property tax, insurance, maintenance and management in operating costs. Exclude debt service, personal income tax and acquisition costs: these results are not cash-on-cash return. No appreciation, resale or future rent forecast. Finite representable inputs/results only; very small nonzero values use scientific notation.

Definition: Nareit: capitalization rate.

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