Rental Yield Calculator
Rental yield shows what percentage of your investment you earn back each year through rent. The higher the percentage, the faster the investment pays off.
Note! The yield is calculated before income tax and any loan costs. The actual yield depends on rent collection, vacancy periods and changes in property value.
Calculate the yield of a rental property or commercial premises at a glance. The calculator shows both gross and net yield, annual net income and the payback period.
How to calculate rental yield?
Rental yield shows what percentage of your investment you earn back each year through rent. It is the most important metric when comparing rental properties or considering whether buying commercial premises is a good investment.
Gross yield is calculated as: annual rental income ÷ purchase price × 100. For example, for a property costing €150,000 that brings in €1,000 rent per month (€12,000 per year), the gross yield is 8%.
Net yield also accounts for costs and gives a more realistic picture: (annual rental income − annual costs) ÷ (purchase price + acquisition costs) × 100. If the same property has €1,500 in annual costs (management, insurance, land tax, maintenance), the net yield drops to 7%.
Gross vs net yield – which to look at?
Gross yield is a quick comparison metric, but it ignores costs and vacancy. Net yield is what actually reaches your pocket. When making an investment decision, always rely on net yield and budget conservatively: include a repair reserve and a couple of weeks of vacancy per year.
What affects rental yield?
In Estonia, rental property gross yields typically fall in the range of roughly 5–9%, depending on location, property type and condition. Prime city-centre office space usually gives lower but more stable yields; older or suburban properties give higher but riskier yields. Yield is also affected by tenant quality, lease length and the growth of the property’s value over time.
If you are considering buying commercial land instead, or want to rent the space out, check commercial property listings to verify market prices.
Frequently asked questions
Rental yield is a percentage showing how much of a property’s cost you earn back each year through rent. It helps compare different investment properties on a common basis, regardless of their price.
Gross yield accounts only for rental income and the purchase price. Net yield also includes annual costs (management, insurance, land tax, maintenance) and acquisition costs, giving a more realistic picture of actual income. Net yield is more important for investment decisions.
Rental property gross yields in Estonia usually range from about 5–9%. Prime city-centre properties have lower but more stable yields; suburban and older properties have higher but riskier yields. A good yield always depends on the level of risk you are willing to take.
The payback period shows in how many years the investment pays for itself through rent: total investment ÷ annual net income. For example, a €150,000 investment generating €10,500 net income per year pays off in roughly 14.3 years.
No, the calculator shows the yield before income tax and any loan costs, so the result is comparable. If you buy with a loan, the cash-on-cash return is usually higher because you invest less of your own money – but interest costs and risk are added.
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