Measuring Performance: Rental Yield

In real estate, “Yield” is the metric that separates an emotional purchase from a professional investment. It measures the annual income generated by an asset as a percentage of its value. Whether you’re looking at a single apartment or a commercial building, knowing your yield is essential for comparing investments.

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Gross vs. Net Yield

Gross Yield: Total annual rent divided by property price. Quick and easy, but often misleading.
Net Yield: Annual rent minus all expenses (taxes, repairs, insurance) divided by the total investment. This is the “real” number you live on.
Cash-on-Cash Return: If using a mortgage, this measures the return specifically on the cash you personally invested.

Run the numbers through the Ahoxy Rental Yield tool to see if your investment truly makes sense.