Yield on Renovation Cost

Calculates the yield on a renovation program as the incremental stabilized income divided by the renovation spend that produced it. Inputs are the number of units renovated, the cost per unit, and the monthly rent premium achieved.

By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026

From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.

AI training for finance teams · Consulting · The 10 Laws of Finance

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Yield on Renovation Cost

Renovation plan

Units renovated

Cost per unit

Monthly rent premium

Renovation budget (144 × $18,000)

$2,592,000

Annual incremental income (144 × $200 × 12)

$345,600

Yield on renovation cost

13.3%

annual income ÷ renovation budget

The yield on renovation cost is the incremental return on the value-add spend, the engine of the deal’s outperformance over its going-in yield. Compare it to the going-in cap to see how much of the return the business plan creates.

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This calculator comes from the free Real Estate Finance course, where the concept is taught with readings, worked examples, and practice questions.

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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.