What is the difference between gross yield and cap rate?

Gross yield is the yearly rent divided by the price, before any costs. Cap rate is net operating income — rent after vacancy and operating costs, but before any mortgage — divided by the price. Cap rate is the figure investors use to compare properties regardless of how they are financed.

What is cash-on-cash return?

The yearly cash flow after the mortgage payment, divided by the cash you put in: the down payment (or the full price if you pay cash) plus closing costs and initial repairs. It shows what your own money earns in cash each year, not counting appreciation, loan paydown or taxes.

Does a Florida rental get a homestead exemption?

No. The homestead exemption and the 3% Save Our Homes cap apply only to a primary residence. Non-homestead property has a 10% cap on assessment increases (not applied to school taxes), and after a purchase the assessment usually resets to about the price. Budget taxes from the price, not the seller's bill.

Is there sales tax on rent in Florida?

Not on a residential lease of six months or longer. Shorter stays are transient rentals, which carry state sales tax and a county tourist development tax, and many cities and associations restrict or license them. Check the rules before you count on short-term income.

What about insurance and flood?

A rental needs a landlord (dwelling) policy, not a homeowner's policy, and wind and flood coverage are often separate. Lenders require flood insurance in some zones. Get quotes for the specific home before you rely on the numbers.

Rental Yield & Cap Rate Calculator

Run the numbers on a Florida rental from your own figures: gross yield, net operating income, cap rate, monthly cash flow and cash-on-cash return, with or without a mortgage.

The property

Purchase price

Closing costs and initial repairs (optional)

Counted as cash invested.

Monthly rent

What comparable homes rent for now, not a projection.

Vacancy and credit loss

Time between tenants and unpaid rent.

Operating costs

Property taxes

A rental has no homestead exemption; expect a new assessment after the purchase.

Landlord insurance

Dwelling (landlord) policy plus wind and flood if separate. Use a quote.

HOA / condo fees

Maintenance reserve

Management

Of collected rent, at the rate a manager quotes you; leave blank if you self-manage.

Other costs

Lawn, pest control, utilities you pay, licenses, accounting.

Financing

How will you buy?

Down payment

Investment loans usually need more down than a primary home.

Interest rate

Term

Yield, cap rate and cash flow

Enter a purchase price and a monthly rent to see the numbers.

An estimate from your own numbers — not financial, tax or legal advice. Not investment advice and not a projection: rents, vacancies, insurance and taxes change, and no one can promise a return. Nothing here is a securities or tax recommendation. Talk to a licensed agent and a lender before you decide.

How it's calculated

Effective rent = rent × 12 − vacancy allowance.
Net operating income = effective rent − taxes − insurance − HOA − maintenance reserve − management − other costs. Cap rate = NOI ÷ price. Gross yield = rent × 12 ÷ price.
Cash flow = NOI − mortgage payments (principal and interest on the loan at your rate and term). Cash-on-cash = yearly cash flow ÷ (down payment + closing costs).
Debt service coverage = NOI ÷ yearly mortgage payments, a ratio many investor lenders check.

Florida notes

No homestead on a rental. The exemption and the 3% cap are for a primary residence only; non-homestead property has a 10% assessment cap, and the assessment resets after a sale.
Sales tax on rent does not apply to residential leases of six months or longer; short-term stays carry sales and tourist taxes and are often restricted by cities and associations.
Insurance and flood are the costs that most often change the answer: landlord policies, wind and flood coverage are priced for the specific home.
Condos: buildings three stories or taller must complete milestone inspections and structural integrity reserve studies, which can mean special assessments. Ask for those records.

A worksheet from your own numbers, not investment, financial, tax or legal advice, and not a projection: no one can promise rents, occupancy or returns. Talk to a licensed agent, a lender and a tax professional.

Looking at Florida investment property?

A licensed real-estate professional can gather the facts behind these numbers — current rents nearby, tax history, association documents, insurance and flood information — before you commit.

Talk to a licensed agent about investment property (954) 703-4504

Rental investment questions

What is the difference between gross yield and cap rate?: Gross yield is the yearly rent divided by the price, before any costs. Cap rate is net operating income — rent after vacancy and operating costs, but before any mortgage — divided by the price. Cap rate is the figure investors use to compare properties regardless of how they are financed.
What is cash-on-cash return?: The yearly cash flow after the mortgage payment, divided by the cash you put in: the down payment (or the full price if you pay cash) plus closing costs and initial repairs. It shows what your own money earns in cash each year, not counting appreciation, loan paydown or taxes.
Does a Florida rental get a homestead exemption?: No. The homestead exemption and the 3% Save Our Homes cap apply only to a primary residence. Non-homestead property has a 10% cap on assessment increases (not applied to school taxes), and after a purchase the assessment usually resets to about the price. Budget taxes from the price, not the seller's bill.
Is there sales tax on rent in Florida?: Not on a residential lease of six months or longer. Shorter stays are transient rentals, which carry state sales tax and a county tourist development tax, and many cities and associations restrict or license them. Check the rules before you count on short-term income.
What about insurance and flood?: A rental needs a landlord (dwelling) policy, not a homeowner's policy, and wind and flood coverage are often separate. Lenders require flood insurance in some zones. Get quotes for the specific home before you rely on the numbers.

Tell us what you need

Selling, buying, renting or moving to Florida — a licensed real-estate professional will contact you. No obligation.

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Premier Real Estate Group Inc

Broker of record Maxim Bohadana, Florida broker license BK3314523

(954) 703-4504

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