What return will the property will give YOU, Property Investor – in other words, its yield.
Before starting to look seriously at a property, most investors work out the yield on the property to see if it makes their shortlist. Although some investors buy property for other reasons – landbanking, infrastructure potential or lifestyle reasons – most are only concerned with its current return and potential yield.
Before we get into the complexities around yields and how to work these out, it’s helpful to understand the different terms.
Investment terms explained
Yield – A yield is a measurement of future income on an investment. It is generally calculated annually as a percentage, based on the asset’s (or investment’s) cost or market value. It has nothing to do with a capital gain on a property.
Gross yield – If you think about your ‘gross earnings’, then you are on the right…
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