Real Estate Investment Calculator
Enter property price, purchase costs, monthly rent, vacancy rate, and annual expenses to calculate gross yield, net yield, monthly cash flow, and payback period.
| Property Price |
JPY
|
|---|---|
| Purchase Costs |
JPY
|
| Monthly Rent Income |
JPY
|
| Vacancy Rate |
%
|
| Annual Expenses |
JPY
|
| Total Investment | [[ fmt(result.totalInvestment) ]] JPY |
| Annual Gross Income | [[ fmt(result.annualGrossIncome) ]] JPY |
| Annual Effective Income | [[ fmt(result.annualEffectiveIncome) ]] JPY |
| Annual Net Income | [[ fmt(result.annualNetIncome) ]] JPY |
Monthly rent by property price and gross yield
Back-calculated monthly rent required to hit each gross yield target (before vacancy and expenses).
| Price \ Yield | 3% | 4% | 5% | 6% | 7% | 8% | 10% |
|---|---|---|---|---|---|---|---|
| 1,000万JPY | 25,000 | 33,333 | 41,667 | 50,000 | 58,333 | 66,667 | 83,333 |
| 2,000万JPY | 50,000 | 66,667 | 83,333 | 100,000 | 116,667 | 133,333 | 166,667 |
| 3,000万JPY | 75,000 | 100,000 | 125,000 | 150,000 | 175,000 | 200,000 | 250,000 |
| 5,000万JPY | 125,000 | 166,667 | 208,333 | 250,000 | 291,667 | 333,333 | 416,667 |
| 10,000万JPY | 250,000 | 333,333 | 416,667 | 500,000 | 583,333 | 666,667 | 833,333 |
The figures above are derived from gross yield only. Use the calculator above to factor in vacancy rate and annual expenses for a realistic net yield.
Seeing the gap between gross and net yield
Enter the purchase price, the acquisition costs, the rental income, the vacancy rate and the running costs, and this tool works out the gross yield, the net yield, the monthly cash flow and the number of years to recover the investment.
**The most important thing about this calculation is that the yield quoted in an advertisement is the gross one.** Gross yield is merely **the annual rent divided by the purchase price**, with nothing deducted for the costs of acquisition, for periods without a tenant, or for management, repairs and tax. **It is the net yield that represents the proportion actually left in your hands**, and for the same property the two diverge widely. **And what moves the result most is the vacancy rate.** A calculation assuming full occupancy easily parts company with reality, and **how you set the vacancy rate transforms both the net yield and the cash flow.** Running the figures on a conservative assumption, and seeing whether they still hold, is the safer course.
How to work it out
- Enter the price and the acquisition costs **Those costs can run to several per cent of the price and pull the net yield down.**
- Enter the rent and the vacancy rate **Do not set the vacancy rate optimistically.** It is what moves the result most.
- Enter management, repair and other running costs What remains after deducting them is the net yield.
- Read the net yield and the cash flow **Note how far they stand from the gross figure.**
Tips for getting more out of it
- Gross yield ignores vacancy and running costs. For a realistic picture, always calculate net yield by factoring in a vacancy rate (typically 5–10%) and annual expenses such as management fees, repairs, and property tax.
- In Japan's major cities, a gross yield of 5–8% is a common benchmark for income-producing properties. Yields above 10% are often found in regional or older properties — higher returns typically come with higher vacancy and repair risk.
- A negative monthly cash flow doesn't always mean the investment is a loss. Depreciation deductions can create a tax benefit that more than offsets the shortfall on paper. Consult a tax professional to evaluate the full picture.
- The payback period shown assumes 100% equity financing. In practice, using a mortgage (leverage) can significantly boost your cash-on-cash return — provided the interest rate stays below the net yield.
- Location, building age, and tenant demand matter more than yield alone. A high gross yield in a low-demand area can quickly turn negative if the unit sits vacant for months at a time.
Where it comes in useful
Comparing properties
**Ranking them by gross yield alone leads you astray.** Convert each to net on the same assumptions.
Estimating the effect of vacancy
Recalculating at different vacancy rates shows how much the investment can absorb.
Grasping the weight of acquisition costs
**They cut deeply into the yield of the first year.**
Establishing the recovery period
You can see over how many years the money put in is calculated to come back.
Terms in property investment
- Gross yield
- Annual rent divided by purchase price. **With neither costs nor vacancy deducted, it is no basis for comparison.**
- Net yield
- The yield after acquisition costs, vacancy and running costs. **This is the one close to what actually remains.**
- Vacancy rate
- The proportion of the year without a tenant. **How this figure is set moves the result more than anything else.**
- Acquisition costs
- What is spent on taking ownership: agency fees, registration, taxes and the rest.
- Cash flow
- The money genuinely left over once running costs and loan repayments are taken from the rent.
- Recovery period
- The number of years until the money put in is recovered. The higher the yield, the shorter it is.
Frequently Asked Questions
Side Note — The Hidden Gap Between Gross and Net Yield
Almost every "yield" figure you see in a real estate listing is the gross yield — annual rent divided by purchase price, with no deductions whatsoever. It's a useful shorthand for quick comparisons, but it can be dangerously misleading. A 12% gross yield on a 30-year-old apartment block can easily shrink to 4–5% once you account for a 10% vacancy rate and annual expenses running at 20% of rental income.
Net yield (also called cap rate in the US context) divides net operating income by total acquisition cost, including purchase taxes, agent fees, and registration costs. In Japan, these transaction costs typically add 5–8% on top of the property price, which alone can shave 0.5–1 percentage point off the net yield versus gross yield.
A concept widely used among professional investors is the cash-on-cash return (CCR): annual cash flow after debt service divided by the equity you actually put in. When borrowing costs are lower than the property's net yield, leverage amplifies your equity return — this is called "positive leverage." The reverse is equally true: if your mortgage rate exceeds the net yield, every yen you borrow actually destroys value.