Gross rental yield
Annual rent as a percentage of the property's price, before any costs.
- Gross yield = annual rent divided by price, times 100
- Quick way to compare properties
- Ignores costs, so it overstates the return
How it works
Multiply the weekly rent by 52, divide by the purchase price and multiply by 100.
Its limits
Gross yield ignores strata levies, rates, insurance, management and vacancy. Use net yield for a truer picture.
A property bought for $600,000 renting at $550 a week earns $28,600 a year. Its gross yield is $28,600 divided by $600,000, which is about 4.8%.
Illustrative only. Figures are examples, not a forecast or recommendation.
Yield and growth often pull in opposite directions. Your plan decides which matters more for each purchase.
Common questions
What is a good gross yield?
It depends on the market and property type. Compare like with like.
Should I use asking or achieved rent?
Achieved rent from recent leases is more reliable.
Related terms
Sources
General information only. It does not consider your objectives, financial situation or needs, and is not financial, credit, tax or legal advice. Rules change, so check current law and get advice from a licensed professional before acting.