Gross Rental Yield
Gross Yield = (Annual Rent / Property Value) x 100
Net Rental Yield
Net Yield = (Annual Rent - Annual Expenses) / Property Value x 100
Yield Benchmarks
As a general rule, yields above 5% are considered strong for residential property. Below 3% typically requires significant capital growth to justify the investment.
High Yield Caution
Very high yields (above 7-8%) can sometimes signal higher risk — declining population, limited buyer pool, or economic dependence on a single industry. Always investigate the fundamentals behind a high yield.
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