Real Estate
Gross rental yield
The headline figure, ignoring all costs. Useful as a screen and as a like for like comparison between properties.
The Formula
gross yield = annual rent / property value
The headline figure, ignoring all costs. Useful as a screen and as a like for like comparison between properties.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| Y g | Gross yield | ratio | Rent as a percentage of value, before costs. |
| R | Annual rent | currency | Total rent received in a year. |
| V | Property value | currency | Purchase price or current market value. |
What Each Symbol Means
Y gratio
Gross yield
Rent as a percentage of value, before costs.
Rcurrency
Annual rent
Total rent received in a year.
Vcurrency
Property value
Purchase price or current market value.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate rental yield page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Rental Yield, filed under Finance. Every number the guide produces comes from substituting into this one line.