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What is yield?

Terminology can be confusing when investing, here we look at what "yield" is in regard to being a landlord.

In relation to property, yields can be divided into two categories, gross yield and net yield. Gross yield is the percentage returned from an investment in property, derived by dividing the rent per annum by the value of the property and multiplying by hundred.

Net yield is the gross yield less any expenses. For example, if you own an investment property and are receiving $250 per week rent and the property is valued at $230,000, then the gross investment yield you are receiving is 5.6 per cent. If you have annual expenses of $5,000, then the net yield is 3.4 per cent.

Footnote: Use our special "Rental Yield Calculator" in the aussieproperty.com Property Investors Tool Box, available free once you have registered as a member.

- yield, rental, property, return

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