Gross and net rental yield on an investment property, after the 7.5% rental tax.
Net rental yield
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Gross yield
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Rental tax
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Net income
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Yield is the rent your capital earns
Rental yield answers a buyer's question, not a taxman's: if I sink money into this property, what return does the rent give me each year? It is the annual rent expressed as a percentage of what the property is worth. A KES 10 million flat that brings in KES 960,000 of rent a year yields 9.6 percent gross. That single number lets you stand two properties side by side and see which one works the capital harder, regardless of price tag. It is the property world's version of an interest rate on your money.
Gross yield is the rough cut. It uses rent before anything is taken out, so it flatters every property equally and is useful only for a first sort. The number that decides whether a building is actually worth owning is the net yield, which strips out the costs of holding it. This tool reports both, and the gap between them is where the real decisions live.
The costs that pull gross down to net
Two things stand between gross and net. The first is the rental income tax, which this calculator applies at 7.5 percent of gross rent under Kenya's Monthly Rental Income rules, the figure modelled here and worth confirming with the Kenya Revenue Authority since the rate has been revised before. The second is your annual running costs: service charge, repairs, and management fees. Tax is just one line in that stack, which is the right way for an investor to see it. A property is not good or bad because of its tax bill alone; it is good or bad because of what lands in your pocket after every cost, and the net yield rolls all of that into one comparable figure.
Comparing on net, not gross: a KES 10m flat
Suppose you are weighing a KES 10,000,000 apartment that rents for KES 80,000 a month, with KES 120,000 a year of service charge, repairs, and management. Annual rent is KES 960,000, which sits inside the MRI band, so the rate this calculator applies bites. Here is the walk from gross to net.
| Step | Working | KES |
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The headline 9.6 percent gross yield falls to 7.68 percent net once tax and costs come off. That 1.92 point gap is the part most buyers forget, and it is enough to flip a "great deal" into an ordinary one. The chart shows the three slices of rent.
What a yield figure quietly hides
Net yield is powerful but it is not the whole story, and treating it as such is the classic buyer's error. It assumes the property is fully let all year. Build in even one void month and the real return drops, which is why a slightly lower yield in a high-demand neighbourhood often beats a juicier number where tenants are scarce. Yield also says nothing about capital growth: a low-yielding flat in an appreciating area can out-earn a high-yielding one in a flat market once you sell. And it ignores the cost of any loan you used to buy, which is a personal financing question rather than a property one.
Use this tool as a screening filter. Run several properties through it, rank them on net yield, then layer in the things it cannot see: location demand, expected void rate, the realism of your cost estimate, and your growth expectations. A useful habit is to pad the running costs slightly, because new landlords routinely underestimate repairs and the odd legal or vacancy cost. Since the tax rate baked into the net figure has changed before, confirm the current MRI position with the KRA when a purchase decision hinges on it.
Should I compare yield before or after tax?
After tax and after costs, every time, because that is the return you actually keep. Gross yield is fine for a quick first sort across many listings, but two properties with identical gross yields can deliver very different net yields once their service charges and management fees differ. This tool leads with the net figure for exactly that reason.
Why did the tool show no rental tax on my property?
Because your annual rent fell outside the MRI band. Below KES 288,000 a year residential rent is not subject to Monthly Rental Income tax, so the calculator deducts no tax and your net yield rises accordingly. Above KES 15 million the rent leaves MRI for normal income tax with expenses, which this yield tool does not attempt to model, so treat its net figure as MRI-based only.