Gross Rental Yield
Gross rental yield is a property's annual rent divided by its purchase price, expressed as a percentage. It's the fastest way to screen and compare rental markets before running full expense numbers.
Gross yield = (monthly rent × 12) ÷ purchase price. Because it ignores expenses, it overstates what you'll actually keep, but it's consistent, so it works well for ranking neighborhoods and ZIP codes against each other. Affordable DFW submarkets typically screen at 7–9% gross yields, versus 3–5% in premium areas.
Once a market screens well on gross yield, underwrite the specific deal with net numbers: taxes, insurance, maintenance, vacancy, management, and financing.
Worked example
A Garland house is bought for $240,000 and rents for $1,800/month. Gross yield = ($1,800 × 12) ÷ $240,000 = $21,600 ÷ $240,000 = 9.0%.
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