Rental Yield Calculator
Calculate gross and net rental yield percentages from annual rent, property purchase price, and annual expenses, in NPR, INR, or PKR.
How this works
Rental yield expresses annual rent as a percentage of the property's purchase price. Gross yield ignores expenses; net yield deducts them first.
grossYieldPct = (annualRent / purchasePrice) × 100
netYieldPct = ((annualRent − annualExpenses) / purchasePrice) × 100Yield is an asset-level metric and does not include the EMI on a loan you took to buy the property — for the after-finance return, use the cash-on-cash figure on the Property ROI calculator.
Worked example
Apartment bought for NPR 1,50,00,000, rented at NPR 75,000 / month (NPR 9,00,000 / year), with annual expenses of NPR 1,20,000:
- Gross yield =
9,00,000 / 1,50,00,000 × 100= 6.00% - Net yield =
(9,00,000 − 1,20,000) / 1,50,00,000 × 100= 5.20%
Compare this to a fixed-deposit or sovereign bond rate before treating real estate as a pure yield play.
Sources
- Standard residential investment yield (gross / net rent over price)
FAQ
What is rental yield and how is it calculated?
Rental yield is the annual rent expressed as a percentage of the property's purchase price. Gross yield is rent ÷ price × 100. Net yield deducts annual expenses (maintenance, property tax, vacancy, repairs, society dues, insurance) before dividing. For a property bought at NPR 1,50,00,000 with annual rent of NPR 9,00,000 and NPR 1,20,000 of yearly expenses, gross yield is 6.0% and net yield is 5.2%.
What is a healthy rental yield in Nepal and India?
Residential rental yields in Kathmandu, Pokhara, and tier-1 Indian cities typically run between 2.5% and 4.5% gross — lower than most public market alternatives. Commercial property and shop spaces in high-foot-traffic locations can reach 6% to 9% gross. If you are seeing a residential gross yield above 6%, double-check that the rent figure is realistic and not aspirational.
What expenses should I include in the net yield calculation?
Include every recurring outflow tied to the property: property tax, maintenance and repairs (budget 0.5% to 1% of property value annually), society or apartment association fees, insurance, and a vacancy allowance (typically one month's rent per year, or about 8% of annual rent). Exclude the loan EMI — yield measures the asset's intrinsic income, not your financing structure.
Why is gross yield always higher than net yield?
Gross yield ignores expenses and treats every rupee of rent as profit, while net yield subtracts the costs of owning and renting the property. The gap between gross and net is roughly 1 to 2 percentage points for a well-maintained residential rental — wider for older buildings or properties with high vacancy. Always quote net yield when comparing real estate to other investments.
Should I include the loan EMI when computing yield?
No. Yield measures the asset's return independent of how you financed it. If you want the after-finance return, compute cash-on-cash return (rent minus expenses minus EMI, divided by the down payment), which is what the Property ROI calculator surfaces. Yield is the asset metric; cash-on-cash is the investor metric.
Does changing the currency affect the yield calculation?
No. Yield is a ratio, so the currency cancels out — switching from NPR to INR or PKR does not change the percentage. The currency selector is a labelling change only and does not perform any FX conversion. As long as rent, price, and expenses are all entered in the same currency, the yield is correct.