The Home Category The Home: family money matters

How to Calculate the Yield of a Property

Calculate the yield of your property by figuring out how much return you get on your total investment in a property.

To get the net yield, you will need to add up the payments (like repairs and fees), and deduct them from your property's total annual income to get the net income. The yield on your property will be the ratio of income to total investment, expressed as a percentage.

Add the total revenues from the property for the past year. This could include rent, but also other leasing income, for instance if you rent the garage separately, or if you have a piece of land that is utilised by others, for which you receive payment.

Add the total expenses for the property. Refer to your financial records to find payments water, sewer, waste removal or real estate agent fees (if you use a broker to find tenants or for management). It's a good idea to keep a notebook of costs, and write them down as they happen, so payments for a bit of hardware or an air conditioner filter don't get lost.

Deduct the payments from the revenue to get the net income.

Divide the net income by the property value to get the property yield. If your annual net income is £9,750, and the property value is £97,500, your annual yield is 10 per cent.