If you’re investing in property, you’ll likely hear the term rental yield. Simply put, rental yield measures how much income a property earns compared to its value. It’s a helpful way to see how hard your investment is working for you.
At Summit Property Management, we help investors understand the numbers so they can make confident decisions.
Gross rental yield is the annual rental income expressed as a percentage of the property’s value. It’s a quick calculation and doesn’t include expenses.
Formula:
Gross Rental Yield = (Annual Rent ÷ Property Value) × 100
Example:
$600 per week × 52 weeks = $31,200 per year
$31,200 ÷ $700,000 × 100 = 4.46% gross yield
Gross yield is useful for comparing properties, but it doesn’t show the full picture.
Net rental yield takes things a step further. It deducts costs such as:
This gives you a clearer view of your true return.Compare our fees
Before purchasing an investment property, research comparable rentals, understand demand in the area, and obtain a professional rental appraisal. Calculating both gross and net yield will help you make informed, confident decisions.
If you’d like a rental appraisal or expert advice, contact Summit Property Management today.