1. What is a Buy to Rent Calculator?

Definition: This calculator estimates the annual rental yield percentage based on monthly rent and property value.

Purpose: It helps real estate investors evaluate the potential return on investment for rental properties.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Yield — Annual return percentage
• Rent — Monthly rental income ($)
• Property Value — Purchase price or market value ($)

Explanation: The formula converts monthly rent to annual rent, then calculates what percentage this represents of the property value.

3. Importance of Rental Yield Calculation

Details: Yield helps investors compare properties, assess investment viability, and make informed purchasing decisions.

4. Using the Calculator

Tips: Enter the expected monthly rent and property value (purchase price or market value). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good rental yield?
A: Typically 5-8% is decent, but this varies by market. Higher-risk areas may offer higher yields.

Q2: Does this include expenses?
A: No, this is gross yield. For net yield, subtract expenses from annual rent before calculating.

Q3: Should I use purchase price or current market value?
A: For new purchases, use purchase price. For owned properties, current market value shows current yield.

Q4: How does this differ from capitalization rate?
A: Cap rate uses net operating income, while this calculates gross yield before expenses.

Q5: What other factors should I consider?
A: Also consider property appreciation potential, vacancy rates, maintenance costs, and local market trends.