Rental yield

How Rental yield is calculated

Gross yield = (Annual rental income ÷ Property value) × 100

Net yield substitutes annual income after operating expenses for rental income.

Why Rental yield matters for your revenue

Short-term letting usually raises gross yield and also raises costs, so net yield is the only fair comparison against a long-term tenancy. Quoted yields that omit management, cleaning and vacancy are not comparable.

Related terms

• Cap rateCap rate expresses a property's annual net operating income as a percentage of its value or purchase price. It allows investors to compare the income return of different assets independently of how each purchase was financed.
• Net operating incomeNet operating income is the revenue a property generates after operating expenses but before mortgage payments, depreciation and income tax. Operating expenses include management, cleaning, utilities, insurance, supplies and routine maintenance.
• STR vs LTRSTR versus LTR is the comparison between letting a property to short-staying guests and letting it to a tenant on a long lease. Short-term letting typically produces higher gross income with higher costs, more variability and more regulation; long-term letting produces lower, steadier income.
• Occupancy rateOccupancy rate is the share of available nights that were booked in a period, expressed as a percentage. Nights the owner blocked for personal use are normally excluded from the available count, so the figure reflects commercial performance rather than calendar availability.