Rental yield calculator for Kenya
See what a rental building or flat really returns once empty months, running costs, agent fees and rental income tax are taken out.
Net yield
10.7%
Gross yield
14.4%
- Rent if always full
- KES 2,592,000
- Rent actually collected
- KES 2,332,800
- Running costs
- − KES 240,000
- Management fee
- KES 0
- Rental income tax
- − KES 174,960
- Net income per year
- KES 1,917,840
At this net income the property pays for itself in about 9.4 years, before any rise in its value or rent.
Gross yield and net yield
Gross yield is a year's rent, with every unit let, divided by what the property cost. It is quick to work out but flatters every building.
Net yield is the income you actually keep after empty months, running costs, any agent fee and rental income tax, divided by the same cost. It is the number to compare with a fixed deposit or a treasury bond.
What to include in running costs
- Repairs and repainting between tenants
- Caretaker and security salaries
- Water and electricity for shared areas
- Insurance and county land rates
The tax line uses Kenya's 7.5% monthly rental income tax on rent collected. Loan repayments aren't included, so the yield shows the property's own return.
Questions
What is a good rental yield in Kenya?
It depends on the area and the type of property, so compare net yield, not gross, against what your money could earn elsewhere at similar risk.
How do I calculate rental yield?
Gross yield is yearly rent divided by the property's cost, times 100. Net yield uses yearly rent collected minus running costs, fees and tax instead.
Does occupancy matter much?
Yes. A building that is 80% let earns a fifth less rent than a full one, while most running costs stay the same.