What is rental yield?
Rental Yield is the income on an investment property after subtracting expenses, usually expressed as a percentage of the property's value.
Rental yield is important for several reasons:
- Investment Evaluation: It helps investors assess the potential return on investment (ROI) of a property. A higher rental yield generally indicates a better investment opportunity, but it's important to consider other factors such as location, market trends, and potential for capital appreciation.
- Comparison: Rental yield allows investors to compare different properties or investment opportunities to determine which one offers the best return relative to its cost.
- Risk Assessment: Low rental yields may indicate higher risks, such as low demand, high vacancy rates, or excessive expenses. Evaluating rental yield helps investors understand the risks associated with a particular property.
- Income Stream: Rental yield provides an ongoing income stream for property owners, which can contribute to overall financial stability and cash flow.
- Decision Making: Understanding rental yield can guide investors in making informed decisions about purchasing, selling, or managing investment properties.
Overall, rental yield is a crucial metric for real estate investors as it provides valuable insights into the financial performance and potential profitability of an investment property.
If you have any questions Next Level Property is here to help!
Rental Team
Contact our rental team for all things related to leasing or to arrange a rental appraisal on your investment property.