Gross and net rental yield

Definition

Gross rental yield compares rent with the property price; net yield deducts specified costs.

Why this concept matters

It provides an initial comparison between property projects.

How it works

Gross yield compares yearly rent with the selected property cost. Net yield then deducts the explicitly selected costs.

Calculation guide : Gross yield = yearly rent ÷ property price × 100

What to watch

The word 'net' should always state which costs, works, void periods and taxes are included or excluded.

Simple example

£12,000 yearly rent on a £240,000 property gives a 5% gross yield before costs.

Example currency : United Kingdom (GBP). The reference country controls the example currency.

Related concepts

Cash flow · Leverage · Unrealised and realised gain