Rental Yield
Rental yield measurs how much income a property produces compared to its value.
Quick Reference:
Income Return on Property. Investment Metric. (Annual rent ÷ Property value)×100
Expanded Explanation:
Rental yield helps investors compare properties based on income potential. Gross yield uses the property’s total annual rent, while net yield subtracts expenses such as maintenance and insurance. Fore xample, a $500,000 proeprty earning $25,000 aa year rent has a gross yield of 5%. Yields tend to be higher in regional or lower cost areas and lower in premium suburbs where growth potential is higher.