Foreign Property Yield Calculator
Buying investment property abroad introduces exchange rate risk on top of normal property market risk. This calculator computes the gross rental yield in both the local currency and in US dollars, using the current exchange rate to convert the purchase price and annual rent. It also shows the annual rent in USD so you can compare the return against dollar-denominated investments. Enter the property purchase price, expected annual rent (both in local currency), and the exchange rate (local currency per USD).
Foreign property yield formula
Gross yield (local) = annual rent / purchase price x 100
Purchase price (USD) = purchase price (local) / FX rate
Annual rent (USD) = annual rent (local) / FX rate
Gross yield (USD) = annual rent (USD) / purchase price (USD) x 100
The gross yield percentage is mathematically identical in local and USD terms because the exchange rate cancels. USD figures are useful for comparison with US dollar investment returns and for understanding the absolute scale of the investment.
FX risk considerations
- If the local currency depreciates by 10% against the USD, your USD rent income and USD property value both fall by 10%.
- Currency hedging instruments (forward contracts, options) can protect future cash flows but involve their own cost.
- Consider long-term USD/local currency trends when projecting multi-year returns.
- Rental income from foreign property must be reported on your US federal tax return. Tax treaties may provide relief.
Frequently asked questions
What is gross rental yield?
Gross rental yield is the annual rent income divided by the property purchase price, expressed as a percentage. It does not account for expenses such as property taxes, maintenance, management fees, or vacancy, which are deducted to give net yield.
Why does the exchange rate matter for property yield?
If you pay for the property in USD but receive rent in a foreign currency, both the yield and the capital value of the property will fluctuate with the exchange rate. A depreciation of the local currency reduces your USD-equivalent returns even if local rents are stable.
How is the USD yield calculated?
USD yield = (annual rent in local currency / exchange rate) / (purchase price in local currency / exchange rate) = annual rent / purchase price. The exchange rate cancels out in the gross yield calculation, but it matters when comparing the USD return to dollar-denominated alternatives.
What exchange rate should I use?
Use the rate at which you would repatriate funds. The Federal Reserve H.10 release publishes daily spot rates. For forward planning, use a conservative rate or model multiple scenarios.
What are typical gross yields for foreign property?
Gross yields vary widely by market, from under 3% in prime European cities to 8 to 12% in some emerging markets. Higher yields often reflect higher risk, lower liquidity, or lower capital appreciation expectations.
Official sources
- Federal Reserve Foreign Exchange Rates (H.10): federalreserve.gov/releases/h10/.
- IRS, Foreign Rental Income: irs.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.