Running Yield Calculator
The formula
What the running yield tells you
Income relative to price — the running yield number investors quote first — plus the expense-adjusted net figure that actually matters.
Calculation: Gross yield = income ÷ value; net yield = (income − expenses) ÷ value. Enter your inputs and every substitution is shown below the result.
Reading the result
A yield that beats the risk-free rate by 4+ points is doing something: it prices real risk. Read net and gross together; a fat gross with thin net is an expense problem hiding in plain sight.
Rules of thumb: Residential cap rates commonly sit 4–8 % gross; REIT dividend yields 3–6 %; the comparison that matters is the spread over treasuries.
Limitations and best practice
Trailing income is not forward income — roll the figure on contracted rents or stated coupons, not last year’s surprises.
This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Frequently asked questions
Is a higher running yield always better?
Net or gross for comparisons?
Source & methodology
Standard income-yield arithmetic used across REIT and property analytics.
Running Yield explained: formula, worked example and honest limits
You are comparing options that arrive in different shapes, and Running Yield is the level playing field that makes them comparable. There are plenty of pages about Running Yield; almost none of them show the working. This one does: the formula, every input, a fully computed example, and a sensitivity analysis calculated live from this engine’s own defaults.
In Investing & Markets the same quantity is often quoted under two or three different conventions. The formula printed above fixes one convention and applies it consistently, which is what makes results from this page comparable with each other.
People rarely disagree about arithmetic; they disagree about assumptions that were never written down. Printing the substitution and the sensitivity ranking removes that category of disagreement for Running Yield.
What makes a calculation page trustworthy is that its copy is derived from its own arithmetic: here gross yield = 6.10%, recomputed every time a field changes, and the sensitivity section ranks the inputs that move the result — Asset value / price first, at ≈11.1 % of the headline for a ten-percent error either way in that input. Work down the page and by the end you could re-derive the result in a spreadsheet from memory.
The Running Yield formula, explained
One formula, published in full: Gross yield = income ÷ value; net yield = (income − expenses) ÷ value. Anything you can read, you can reproduce in a spreadsheet, and that reproducibility is the whole point of printing it rather than hiding it behind a button.
Annual income ($) (example value 33,250) is a plain measured quantity — the unit shown in the label is the unit the formula expects. Use the figure exactly as the source document states it, not a rounded memory of it — an omitted line is the classic silent error.
Asset value / price ($) (example value 545,000) is a numeric input whose unit is fixed by the label; a wrong unit is a wrong answer wearing a plausible disguise. Use the figure exactly as the source document states it, not a rounded memory of it — an omitted line is the classic silent error.
Annual expenses / vacancy drag ($) (example value 5,968) is a plain measured quantity — the unit shown in the label is the unit the formula expects. Replace the example with the figure from your own records — the tool recomputes instantly and the printed steps follow your numbers.
A fully worked Running Yield example
Abstract formulas are hard to trust, so here is the complete substitution using the default inputs, written the way an examiner would want it. Starting figures: Annual income ($), Asset value / price ($), Annual expenses / vacancy drag ($). The endpoint of that chain is 6.10% of gross yield, sitting in the “Healthy income yield” band.
- Gross = $33,250.00 ÷ $545,000.00 = 6.10 %
- Net = (33,250.00 − 5,968.00) ÷ 545,000.00 = 5.01 %
Net yield — 5.01%. Compare it against the main result of 6.10% before drawing conclusions.
Expense ratio — 17.9%. If your inputs change, this is usually the first companion figure to move.
Years to recoup at net — 20.0 yrs. If your inputs change, this is usually the first companion figure to move.
Keep this worked example open while you enter your own figures: matching the shape of the substitution is the fastest way to spot a unit or convention mistake.
The Running Yield corridor: your result across a realistic band
The honest version of any estimate is a corridor, and this one is cheap to produce: Running Yield was recomputed at 5 points along the dominant input, with every other field left untouched.
| Asset value / price setting | Gross yield |
|---|---|
| 80 % of the example value | 7.63% |
| 90 % of the example value | 6.78% |
| example inputs | 6.10% |
| 110 % of the example value | 5.55% |
| 120 % of the example value | 5.08% |
Across 5 settings of Asset value / price, the result spans 5.08% to 7.63%. A decision that only works at one row of this table is a decision waiting for an input to move. Reproduce it in the form above by editing Asset value / price alone; the substitution steps will follow your figures exactly.
What actually moves your Running Yield
Generic advice says “it depends on your inputs”; this section says exactly how much. Each field was perturbed by ±10 % in isolation and the gross yield recomputed, so the ranking below is measured rather than asserted. Read it as a map of where Running Yield is fragile — drawn for the example inputs, which is the map you want when deciding what to measure carefully.
- Nudge Asset value / price by ±10 % and Running Yield lands between 5.55% and 6.78% (sensitivity ≈11.1 %)
- Annual income +10 % → Running Yield = 6.71% · −10 % → 5.49% (the gross yield shifts ≈10.0 %)
Asset value / price is the dominant lever here: ten percent either way moves the result by about 11.1 %, from 5.55% to 6.78%. That is where a careless figure does the most damage, so check it against a source, and treat Annual income as the second priority (≈10.0 % per ten percent). The remaining fields can sit at safe defaults without materially changing the answer — knowing which is which is what separates a careful calculation from an anxious one.
What a Running Yield of 6.10% means in practice
The value above only becomes useful the moment you know what it is being measured against. On the example inputs the band reads “Healthy income yield”; your own figures place you on a different rung of the same ladder. The sensitivity list shows how far a modest input error moves you along that ladder: for Asset value / price, ±10 % covers 5.55% to 6.78%. The practical reading rules: ask what would have to change to move you one band. If the answer is “a small, plausible input difference”, the band itself is not the finding — the uncertainty is.
Placing this figure in context: calculators of this kind differ less in arithmetic than in what they choose to ignore. This one keeps Annual income ($) explicit so that the omissions are visible rather than hidden in a preset.
Common mistakes with Running Yield (and the fix)
Trailing income is not forward income — roll the figure on contracted rents or stated coupons, not last year’s surprises. This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Chasing one metric. Running Yield needs its pair (Net yield) the way a speedometer needs fuel pressure — one number alone has burned more portfolios than bad markets.
This model has its own particular trap: Asset value / price carries ≈11.1 % of the response per ten percent of error, so effort spent elsewhere is largely decorative.
The subtlest error is answering the wrong question precisely. Confirm that gross yield is actually the quantity your decision needs — the arithmetic is flawless either way, which is what makes the mistake invisible.
Running Yield verification checklist
- Verify each input against its original source document, not memory.
- Recompute once with the dominant input deliberately set low, and see whether the decision changes.
- Check Asset value / price before anything else: it is the measured dominant input, ≈11.1 % of Running Yield per ten percent.
- Check that every field the formula needs actually arrived from a document, not from recollection.
- Confirm the example values are plausible for your own situation before replacing them.
- Run the ±10 % stress on the top two levers and check that your conclusion survives both.
Step by step: getting a trustworthy Running Yield out of this tool
The tool does the arithmetic; the routine below is what makes the arithmetic trustworthy. Five steps, a minute total — and afterwards you will know not just what the number is, but which assumption produced it.
Step 1 — gather before you type. Running Yield depends on annual income ($), asset value / price ($), annual expenses / vacancy drag ($). Collect them from a source document — a statement, a report, an invoice, a log — rather than from memory, because recalled inputs are the single largest cause of wrong results. Compare the calculation to the rough guess you arrived with, and ask why they differ.
Step 2 — start from the case you can defend. Enter pessimistic-but-honest figures first; the optimistic run is a ceiling, not a plan. A conclusion that holds on conservative inputs holds everywhere. Estimates improve most when the worst case is written down in ink.
Step 3 — play with the inputs on purpose. Ten percent up, ten percent down, one field at a time. Within a few minutes you will know this calculation better than most people who quote its results. Write the figure down before moving on; memory flatters whichever number you saw last.
Step 4 — compute a corridor, not a point. Three runs — worst, likely, best — turn Running Yield from a snapshot into a range. Plan against the pessimistic end and treat the optimistic end as the upside story. Most surprises in numbers are surprises about inputs, not about formulas.
Step 5 — schedule the next run. In Investing & Markets the inputs drift quietly. Put a reminder a quarter out, re-enter the same fields, and read the change rather than the level. When two sources disagree, it is almost never the arithmetic that differs.
Where Running Yield matters in practice
In Fixed Income the figure computed here is usually the first one somebody asks to see. Having it — with the formula behind it — changes your position in the conversation from participant to reference. When two sources disagree, it is almost never the arithmetic that differs.
Used properly this is a five-minute filter that saves weeks. Compute Running Yield, reject what fails, and only then bring in the expensive analysis for the survivors. If the answer changes your behaviour, it deserves a second run with different assumptions.
Treat Running Yield like a smoke alarm rather than a painting — its value is in being tested periodically, not in being admired once. Write the assumptions in the same file as the result, and future arguments take minutes instead of meetings.
People also ask about Running Yield
What affects Running Yield the most?
Measured on this engine, Asset value / price is the dominant lever: moving it ±10 % shifts the gross yield across 5.55% to 6.78% — about 11.1 % of the headline, with Annual income next at ≈10.0 %. The ranked list in the sensitivity section is computed live, not asserted from a template.
Which matters more: annual income or asset value / price?
By the numbers, Asset value / price: a ten-percent change in it moves the result ≈11.1 %, versus ≈10.0 % for Annual income. Spend your measuring effort in that order — precision on the weaker lever buys almost nothing.
What is a typical Running Yield?
There is no honest universal average for Running Yield, but there is a reference point: the defaults on this page produce 6.10% (Healthy income yield). Replace the inputs with your own and compare — that comparison is the useful meaning of “typical”.
How do I calculate Running Yield by hand?
Gross yield = income ÷ value; net yield = (income − expenses) ÷ value is the entire method. Work the inputs in that order — Gross = $33,250.00 ÷ $545,000.00 = 6.10 % — and you will reach 6.10% on the default figures, the same number this tool prints.
What happens to Running Yield if asset value / price changes by 10 %?
The engine was re-run with that field moved by ten percent while everything else stayed fixed: the gross yield goes across 5.55% to 6.78%, a swing of roughly 11.1 % around the 6.10% baseline. That ratio is the practical definition of how much this input matters.
Is the Running Yield result of 6.10% good or bad?
Neither, on its own — the label “Healthy income yield” is the band this figure falls in for the example inputs, and your own inputs will place you elsewhere on the same ladder. Judge the number against your history and your alternatives, and remember that a ten-percent error in Asset value / price alone moves it by ≈11.1 %.
Can I predict future returns with Running Yield?
No tool predicts; Running Yield computes implications. Use it to ask "if these inputs hold, what follows" — then stress the assumptions.
Is Running Yield accurate?
The arithmetic is exact: Gross yield = income ÷ value; net yield = (income − expenses) ÷ value is evaluated with full floating-point precision and every substitution is printed in the worked example. What limits accuracy is input quality and the model’s assumptions, so treat the 6.10% result as the correct answer to the question you typed — and check the assumptions section before acting on it.
Is a higher running yield always better?
No — yield is risk made visible. Distress, vacancy or one-off income inflate it; check durability before price.
Net or gross for comparisons?
Net, always. Two assets with equal gross can differ by two points of net once expenses and vacancy are honest.
Is my data private on this page?
Yes — computation happens locally in your browser, with no account, no tracking of your inputs and nothing sent to a server. The printed formula is the whole story of what happens to your figures.
Glossary for Running Yield
- Net yield
- 5.01% in the default Running Yield calculation — one of the secondary figures an experienced reader checks before trusting the primary number.
- Expense ratio
- 17.9% for the Running Yield worked case; it sits next to the main result because it carries context the headline leaves out.
- Years to recoup at net
- 20.0 yrs for the Running Yield worked case; it sits next to the main result because it carries context the headline leaves out.
- Gross yield
- The primary output of this tool: 6.10% for the default inputs, computed exactly from Gross yield = income ÷ value; net yield = (income − expenses) ÷ value.
- Worked example
- The step-by-step substitution printed above, so the arithmetic can be re-derived by hand or in a spreadsheet.
- Verdict band
- The plain-language label — here “Healthy income yield” — mapping the computed figure onto experience-based ranges for Investing & Markets.
- Sensitivity (±10 %)
- How far the Running Yield moves when a single input is nudged ten percent either way; the ranked list on this page is computed live from this engine.
Methodology, sources and limits
Everything above runs on one stated formula, applied without hidden coefficients: Gross yield = income ÷ value; net yield = (income − expenses) ÷ value. Source of record: Standard income-yield arithmetic used across REIT and property analytics. Where a professional version of this calculation differs, it differs in inputs and jurisdiction-specific coefficients, not in the algebra — which is why re-checking your inputs beats hunting for a second calculator.
Treat the output as a precise answer to the question you typed: exact arithmetic, transparent formula, published source, no hidden rounding. The promise to the reader is narrow and testable: same inputs, same output, no silent rounding, and no figure presented without the formula that produced it.
Turning this Running Yield into a decision
Run the pessimistic case before the optimistic one; an opportunity that survives the pessimistic inputs is the only kind worth pursuing.
Whoever you are (investors and founders comparing opportunities on equal terms), the next step is the same: replace the example inputs with your own, note the date, and re-run whenever a figure moves. In Investing & Markets, a dated figure is a trend, and an undated one is a rumour.