Understanding Yield Before Investing In The Property Market

If you’re considering investing in the property market, yield is a key term to know.  

Prospective landlords use yield as an indicator to establish the investment potential of a property.

Those seasoned in the Real Estate game use yield as a guide to determine whether or not a home is a contender for their shortlist when on the hunt for a new investment.

Of course, there are other aspects that inform the value of a property investment, including land banking, the potential for future infrastructure connection, a seascape, or even those thinking of their future retirement location.

Yield calculations tend to be annually based, and expressed as a percentage of the asset’s market value. 

A yield percentage provides an approximate indication of that asset’s rental income, compared with the value of the property. This figure is calculated as gross yield, before any associated expenses are allocated.

The ideal investment for many is when embarking on the journey of property investment, snagging a dwelling that has multiple cash positives is the dream scenario.