Rental yield

In rental investment, the profitability (or rental yield) is the ratio that measures the gross income generated by the investment relative to its purchase and total cost. It is generally expressed as a percentage and calculated on an annual basis.

There are several types:

  • Gross yield, which takes into account only the amount of rent received;
  • Net yield: all charges relating to the property must be deducted;
  • Net-net yield: this indicator is the most precise, since it includes the taxation on rental income.