# Rental Yield

*Real Estate — Finicade finance glossary*

Rental yield is annual rent as a percentage of a property's value — gross before costs, net after them. The gap between the two is wider than most new landlords expect: management, maintenance, insurance, tax and vacancy typically consume 30–45% of gross rent. A 7% gross yield is often a 4% net yield, before any mortgage payment.

**Formula:** `Net rental yield = (Annual rent − Annual costs) ÷ Property value`

**Also known as:** gross yield, net rental yield, yield on property

**Related terms:** [Cap Rate](https://finicade.com/glossary/cap-rate), [Gross Rent Multiplier](https://finicade.com/glossary/gross-rent-multiplier), [Rental Property](https://finicade.com/glossary/rental-property), [Net Operating Income](https://finicade.com/glossary/net-operating-income), [Passive Income](https://finicade.com/glossary/passive-income)

Source: https://finicade.com/glossary/rental-yield