BE A WISE REAL ESTATE INVESTOR
Home » Real Estate Investing » Gross Rental Yield Calculator (For Quick Checking of Rental Potential)

Gross Rental Yield Calculator (For Quick Checking of Rental Potential)

This is our very own gross rental yield calculator, which will help you compare the rent and the selling price of a target rental property. This is a quick way to see if a property has possibly good returns/earning potential, as compared to the selling price (or if it’s too expensive and has low returns). Check it out below.

Gross rental yield calculator

~

How to use

To calculate for the gross rental yield, just enter the values in the fields for data input:

  • Monthly Rent – This is the monthly rent for your target property in Philippine Peso (PHP)
  • Selling Price – This is the selling price of the property you want to buy in Philippine Peso (PHP)

Explanation of calculated results

After entering the values, the following are automatically calculated and displayed:

  • Monthly Gross Rental Yield – This is the calculated monthly gross rental yield, which compares the monthly rent to the selling price, as a percentage. Can also be referred to as the monthly gross return on investment of a rental property.
  • Annual Gross Rental Yield – This is the calculated annual gross rental yield, which compares the annual rent to the selling price, as a percentage. The annual rent is simply the monthly rent multiplied by 12 months/year. The annual yield is also equal to the monthly yield multiplied by 12. Can also be referred to as the annual gross return on investment of a target rental property.

What returns to aim for

I was asked about this several times when I asked for feedback about this calculator, and my opinions are as follows:

  • It depends on the average returns in your target location. For me, anything significantly above average is worth looking into. “Significant” depends on you. In my case, anything approaching 1% per month or 12% per year is significant.
  • In the US, they use the 1% or 2% rule (refers to monthly gross return). I believe the 1% rule is more applicable here in the Philippines, which is based on my observations, so far (during the past 6 years or so in our target locations). However, as Brandon Turner of BiggerPockets.com would always say, these are not really rules. It’s just a “rule of thumb”, and I agree.

So just because a target property has high rental returns, it does not follow that it is already a good deal that you should buy. As usual, you should do a reasonable amount of due diligence, and continue with your analysis. Refer to the disclaimer and the recommended article below.

Disclaimer

The results you will get above are only for quick analysis. This aims to help you avoid wasting time with those properties that are obviously too expensive to buy to give good returns as a rental. Of course, you will also see those that have good gross returns that deserve more thorough analysis.

Again, this calculator only computes for the GROSS rental yield/return on investment where vacancy rates, property management, taxes, maintenance, loan payments (if any) and other applicable expenses, are NOT YET considered. To take this further, you should check/estimate the NET returns.

Recommended reading

To estimate the possible NET returns of a rental property, please refer to the following article:

As always, our standard site disclaimer applies.

~~~

Did you find this calculator helpful? Any suggestions? Let me know by leaving a comment below. Thanks!

Photo of author
About Jay Castillo
People encounter problems and make mistakes when buying foreclosed properties, and Jay wants to help people avoid those problems/ mistakes. Jay encountered a lot of those, which is why he started this blog in 2008 to serve as a guide where he shares lessons learned, and how to overcome challenges you may encounter when investing foreclosed properties in the Philippines … [Read more]
FREE CHECKLIST: IDENTIFY AND AVOID PROBLEMATIC FORECLOSED PROPERTIES BY DOING PROPER DUE DILIGENCE!
Avoid losing money, wasted time and effort caused by buying foreclosed properties that have too many problems, with our free 60-item Property Due Diligence Checklist. Grab your free copy now.
Share

Enrollment now open - How to Buy Foreclosed Properties (that are profitable!) training

00
Months
00
Days
00
Hours
00
Minutes
00
Seconds

Did you miss buying a foreclosed property because it was too late when you saw the listing/ auction schedule?

Here's the solution...

DON'T BE THE LAST TO KNOW!

GET UPDATES FOR FORECLOSED PROPERTIES VIA EMAIL

Join over 100,000 smart real estate investors who receive

updated foreclosed property listings, auction schedules,

and real estate investing tips via email, it's free!

No thanks / Already subscribed
x
We take privacy seriously and we'll never spam you.
Please refer to our Privacy Policy

X
I'm looking for foreclosed properties in...


Looking for an article?
Click here to search the blog
Share