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Rental Income Requirement Calculator

Work out rental income requirement instantly with clear inputs, formula shown and shareable results.

About Rental Income Requirement Calculator

Net rental income is well below gross rent once vacancy and operating costs are deducted, so the gross rent needed is higher than the target. Dividing that by the gross yield gives the property value the target actually requires.

Formula

Rental requirement

Gross rent = target / [(1 - vacancy)(1 - operating share)]; property value = gross rent × 12 / gross yield

Worked example

With the default values below, Rental Income Requirement Calculator returns Property Value Required of $27,950,311. Change any input above and every figure here is recalculated in your browser.

Inputs used

Target Monthly Rental Incomeminimum 0
60,000
Gross Rental Yieldaccepts 0.5–15 %
3.5 %
Vacancy Rateaccepts 0–40 %
8 %
Operating Costs As Share Of Rentaccepts 0–60 %
20 %

Results

Property Value Required
$27,950,311
Gross Monthly Rent Required
$81,521.74
Net Rental Yield
2.5760%
Annual Net Income Target
$720,000.00

Step by step

  1. 1Values used
  2. 2Rental requirement
  3. 3Property Value Required= 27,950,311
  4. 4Gross Monthly Rent Required= 81,521.74
  5. 5Net Rental Yield= 2.5760
  6. 6Annual Net Income Target= 720,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates for planning only. Prices, returns, inflation and personal circumstances all change. This is not financial or tax advice — speak to a qualified adviser before making decisions.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates for planning only. Prices, returns, inflation and personal circumstances all change. This is not financial or tax advice — speak to a qualified adviser before making decisions.

Frequently Asked Questions

Why is net yield so much lower than gross?

Vacancy, maintenance, tax and management fees together typically consume a quarter or more of gross rent.

Is property efficient for income?

It is capital-intensive relative to the income produced, which is why the required property value is so large.

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