Rental yield – essentially the rate of rental income returned against the costs of an investment property is a great indicator of a property’s investment potential. But you need to keep things in perspective when you factor it into your decision to purchase property. Calculating rental yield A good first step in examining rental yield’s impact on the investment potential of a property is to recognise that there are two types of rental yields, gross and net, and they are calculated differently. In property, gross rental yield is calculated by dividing the annual rental income you receive by the property value, and then multiplying this figure by 100. For example, if you collect $20,800 rent annually ($400 per week) and your property value is
