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%.
Put it to work
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