Unlevered Yield

NOI as a percentage of current property value (same as cap rate).

Example Result

Sample Data

5.28%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Unlevered Yield Formula

NOI / Property Value x 100

$20,344 / $385,000 x 100

5.28%

What This Means

A sample property priced at $385,000 with $2,850/month rent has a unlevered yield of 5.28%. Comparing unlevered yield to your mortgage interest rate tells you if leverage is helping or hurting. If unlevered yield exceeds your interest rate, leverage amplifies returns. If it's lower, leverage is actually reducing your total return. You can also compare unlevered yield directly to Cash Flow Return on Equity (the levered version of this metric) — if Cash Flow ROE exceeds unlevered yield, leverage is boosting your cash-on-equity returns.

Where This Value Comes From

Unlevered Yield is not entered directly — it is calculated from Net Operating Income and Property Value. See the formula breakdown above and the detailed inputs below.

Calculated From

Unlevered Yield is calculated using these inputs:

Net Operating Income

Income remaining after all operating expenses but before debt service.

$20,344

Property Value

The current estimated market value of the property.

Found on your county assessor

$385,000

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Why It Matters

Comparing unlevered yield to your mortgage interest rate tells you if leverage is helping or hurting. If unlevered yield exceeds your interest rate, leverage amplifies returns. If it's lower, leverage is actually reducing your total return. You can also compare unlevered yield directly to Cash Flow Return on Equity (the levered version of this metric) — if Cash Flow ROE exceeds unlevered yield, leverage is boosting your cash-on-equity returns.

Detailed Explanation

Unlevered Yield is the return the property generates independent of any financing — it equals the cap rate. It represents what your return would be if you owned the property free and clear with no mortgage.