RUV CalculatorRental Yield Calculator (South Korea)https://calc.ruvlabs.com/c/rental-yield
Rental Yield Calculator (South Korea)
Real yield after leverage, with Korean deposits
No United States version of this calculator yet. What we do have:
Leveraged Yield
Leverage is working
Gross Yield
Actual Investment
300,000,000 KRW
30,000,000 KRW
1,000,000 KRW
Advanced options
150,000,000 KRW
Breakdown
Annual Net Income
4.38% annually on ₩120,000,000 of actual capital.
₩300M property, ₩1M monthly rent — what yield?
4.38% annually on ₩120,000,000 of actual capital.
An example with the starting values. Change the inputs above for your own numbers.
Gross yield versus return on capital
Gross yield is annual rent over purchase price: 1M a month on a 300M property is 12M a year, or 4%.
What drives decisions is the return on capital actually committed — price less tenant deposit less loan. On 300M with a 30M deposit and a 150M loan, that is 120M. Net income is rent less loan interest.
At 4.5% the interest is 6.75M, so net income is 12M − 6.75M = 5.25M, a 4.38% return on 120M. Leverage lifts the yield by shrinking the capital committed — and works in reverse the moment interest exceeds rent.
When leverage turns against you
Ignoring vacancy always flatters the number. Studios and officetels turn over often; one or two empty months a year is realistic, plus broker fees and redecoration on each change. Put that into annual costs.
Not stress-testing the rate is the dangerous one. A 4% gross yield leveraged at 4.5% already loses money on the borrowed portion. Rerun two points higher.
Property and rental income taxes are routinely omitted — property tax, comprehensive real estate tax, and income tax on rental income above 20M a year.
How the loan rate flips the return
A 300M won flat let for a 30M deposit and 1M a month, bought with a 150M loan, has the same gross yield at any interest rate, but the return on the 120M of cash actually invested swings with the loan rate. Computed with this calculator with no running costs or taxes.
Return on cash invested by loan rate (won)
Loan rate
Annual net income
Return on cash
3%
7,500,000
6.25%
4%
6,000,000
5%
4.5%
5,250,000
4.38%
5%
4,500,000
3.75%
6%
3,000,000
2.5%
7%
1,500,000
1.25%
Frequently asked questions
Gross versus actual yield?
Gross yield is annual rent over purchase price. Subtract the deposit and loan and your real capital is far smaller, but interest flows out. The leveraged figure is what drives decisions.
Is leverage always good?
Only while the rental yield exceeds the loan rate. Above that, more debt means larger losses. Rerun with rates 2%p higher.
How do I account for vacancy?
Add expected vacancy loss to annual costs — one empty month a year is one month of rent.
Sources
Official documents the rates and rules on this page come from.
This is a reference calculation using common real estate assumptions and is not a substitute for professional advice. We accept no liability for decisions made from it — see the terms of use for details.