Understanding Rental Yield

Gross rental yield is annual rent divided by purchase price. It is easy to quote and easy to overstate, because it ignores every cost of holding the property.

Net yield subtracts the real outgoings: maintenance and sinking fund, assessment and quit rent, insurance, agency fees, repairs, and the vacancy you should assume between tenants.

A unit advertised at a strong gross yield can produce a much more modest net figure once those costs are applied — particularly for small city-centre units with high maintenance charges per square foot.

Use the rental yield calculator on this site to test both figures, and treat any yield presented without its assumptions as marketing rather than analysis.