Real Estate
Net rental yield
Subtracts running costs, but not mortgage interest, so the property's own performance is isolated.
The Formula
net yield = (annual rent - costs) / property value
Subtracts running costs, but not mortgage interest, so the property's own performance is isolated.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| Y n | Net yield | ratio | Return after running costs. |
| R | Annual rent | currency | Total rent received in a year. |
| C | Annual costs | currency | Management, insurance, maintenance, voids. |
| V | Property value | currency | Purchase price or current market value. |
What Each Symbol Means
Y nratio
Net yield
Return after running costs.
Rcurrency
Annual rent
Total rent received in a year.
Ccurrency
Annual costs
Management, insurance, maintenance, voids.
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.