Investing
How to calculate the yield on investment property correctly
Learn the difference between gross and net yield, and which costs you must not overlook.
6 min read
You calculate the gross yield by comparing the annual rental income with the total purchase price. It is a quick first indication, but not yet the full picture.
For the net yield, deduct vacancy, maintenance, insurance, taxes, management fees and financing costs. Future renovations also deserve a place in the calculation.
Don't compare the percentage alone. A strong location, a good tenant and low maintenance needs can more than make up for a slightly lower yield.
