Gross and net rental yield: what is the difference?

Gross yield compares annual rent with price. Estimating net yield requires deducting expenses and defining the cost basis. Do not compare ratios using different definitions. Show vacancy, maintenance and management costs, and identify how financing and taxes are treated.

Practical steps

1. Write the formula, currency and period beside each percentage
2. Use expected collected revenue rather than advertised rent alone
3. Distinguish illustrative calculations from forecasts supported by evidence

General guidance. Consult qualified professionals on legal, financial and technical matters specific to your transaction.