1. What is Zillow Yield?

Zillow Yield is a metric used to evaluate the profitability of rental properties. It represents the annual return on investment from a rental property after accounting for expenses.

2. How Does the Calculator Work?

The calculator uses the Zillow Yield formula:

Where:

• \( Annual\ Rent \) — Total rental income for one year (USD)
• \( Expenses \) — Annual operating expenses (USD)
• \( Property\ Value \) — Current market value of the property (USD)

Explanation: The formula calculates the net annual return as a percentage of the property's value.

3. Importance of Yield Calculation

Details: Calculating yield helps investors compare different rental properties, assess investment performance, and make informed purchasing decisions.

4. Using the Calculator

Tips: Enter accurate annual rent, expenses, and current property value in USD. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a good rental yield?
A: Typically 5-8% is considered good, but this varies by location and property type.

Q2: Should I include mortgage payments in expenses?
A: No, this calculation focuses on operating expenses only. Financing costs are separate.

Q3: How often should I recalculate yield?
A: At least annually, or whenever rental income, expenses, or property value change significantly.

Q4: Does this account for vacancies?
A: No, you should adjust annual rent to account for expected vacancy rates.

Q5: How does this differ from cap rate?
A: Cap rate uses net operating income and purchase price, while yield uses current value.