1. What is Property Yield?

Property yield, also known as rental yield, is a measure of return on investment for rental properties. It shows the percentage of annual income generated relative to the property's value.

2. How Does the Calculator Work?

The calculator uses the property yield formula:

Where:

• \( Annual Income \) — Total yearly rental income ($)
• \( Property Value \) — Current market value of the property ($)

Explanation: The formula calculates what percentage of the property's value is earned back each year through rental income.

3. Importance of Yield Calculation

Details: Yield helps investors compare properties, assess investment performance, and make informed purchasing decisions. Higher yields generally indicate better returns.

4. Using the Calculator

Tips: Enter the total annual rental income and current property value in dollars. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a good property yield?
A: This varies by market, but generally 5-8% is considered good, with higher yields often indicating higher risk.

Q2: Should I use purchase price or current value?
A: For ongoing assessment, use current market value. For purchase analysis, use purchase price.

Q3: Does this include expenses?
A: No, this is gross yield. Net yield would deduct expenses like maintenance and taxes.

Q4: How does location affect yield?
A: High-demand areas often have lower yields (higher prices), while emerging markets may offer higher yields.

Q5: Is higher yield always better?
A: Not necessarily - very high yields may indicate higher risk or lower capital growth potential.