Investors frequently ask: “What is the yield?”
It is an important question. But it should not be the only question.
A headline rental yield may not reflect the investor’s actual net return.
Consider:
Purchase priceAchievable annual rentVacancyService chargesMaintenanceProperty managementFurnishingOther recurring costs
Gross Yield
A simplified calculation
Annual Rental Income ÷ Property Purchase Price × 100
Net Yield
A more meaningful analysis considers relevant operating expenses.
A property advertising a higher headline yield is not necessarily the superior investment.
Ask What Remains After the Expenses.