Nice, detailed, comprehensive answers from Elena and Jennifer. So the answer probably is around 3%. It doesn't appear that either calculation accounted for vacancies, though. Though hopefully it won't occur this often, investors factor in 1 month of vacancy per year, reducing your overall income by 8%. Thus, your projected rental return would be slightly lower.
Frankly, though, a 3% (or 2.5%) return on $1 million doesn't strike me as outstanding. You should be able to do better, either with a different real estate strategy or a different investment strategy.
Also, check with your accountant on the tax implications. It could be that the tax benefits would increase the overall benefits of such an investment. Or--depending on your situation--not. You do need to know that, as well.