What is Rental Yield?
Rental yield is the annual income generated by a property as a percentage of its value — the key metric for measuring real estate investment efficiency.
Gross vs Net Yield
Gross Yield = (Monthly Rent × 12) / Property Value × 100
Net Yield = (Rent collected after vacancy - Annual Expenses) / (Purchase Price + Purchase Costs) × 100
Purchase costs usually include the 5% real estate transaction tax and the 2.5% broker commission plus its VAT; this is the method used by the site’s rental yield calculator.
Practical Example: Riyadh Apartment
- Property value: 800,000 SAR
- Monthly rent: 5,000 SAR
- Gross yield: 7.5%
- One vacant month: rent collected 55,000 SAR
- Annual expenses: 3,000 SAR
- Purchase costs: 63,000 SAR
- Net yield: 52,000 / 863,000 × 100 ≈ 6.0%
Good Yield in Saudi Arabia
There is no official benchmark for a good net yield; it varies with the city, district, property type, vacancy risk and financing cost. Compare your property with similar ones in the same district and with lower-risk alternatives. In the Riyadh urban area rent increases are frozen for five years from 25 September 2025.