Rental Yield Calculator
Gross and net rental yield — no financing, no leverage, just the cash numbers
Frequently Asked Questions
Rental yield measures how much a property actually returns as a percentage of its value from rent alone — separate from any capital appreciation — and Pakistani property discussions routinely conflate a healthy-sounding gross rent figure with the much more meaningful net yield after real running costs are subtracted.
Gross yield vs. net yield — and why the gap matters
Gross yield is simply annual rent divided by property value — a quick, easy number, but one that ignores every cost of actually owning and renting the property. Net yield subtracts property tax, maintenance, an allowance for vacancy periods between tenants, and management fees (if a property manager is used) before dividing by property value, producing a meaningfully lower — and more honest — return figure. The gap between gross and net yield is often large enough to change whether a property looks like a good investment at all, which is exactly why relying on gross yield alone (the number most casually quoted in property listings and conversations) can be misleading.
A worked example
A property advertised with an attractive gross yield can turn out to have a much thinner net yield once realistic maintenance costs, a reasonable vacancy allowance (properties don't stay rented 100% of the time), and property tax are actually subtracted — the gross number alone systematically overstates what an owner actually nets from the investment.
How this connects to your other property decisions
The rent figure you plug in here is the same rent that gets taxed under Rental Income Tax — so your true after-tax net yield is lower still than what this calculator shows, since it models operating costs but not the income tax on the rental income itself. And the property tax input should reflect your actual Property Tax (UIPT) bill, not a guess, since that's one of the larger recurring costs subtracted in the net yield calculation.
Common mistakes
The most common mistake is comparing one property's gross yield against another property's net yield, or against a generic "average yield" figure from an unrelated market — always compare like-for-like (gross to gross, net to net) and, where possible, use net yield for any decision that actually matters, since it's the number that reflects what a property really returns after real costs.