
The many factors that boil into what makes a property valuable can eventually be traced to one thing you want to know. That desired number is what is known as your property yield. A healthy return on your real estate investment is vital toward maintaining your lifestyle and prosperity. Ergo, you may want to conceptualize how much your property is going to earn for you.
Your property yield, in basic terms, is how much of a annual return your property will earn. There are many sort of factors that determine what your precise yield will actually be, all of which can be included in the calculations. Starting off with a baseline estimated return is the best place to start with, however. This isn’t something that can be overlooked, especially if you’re expecting to break even on your owned property.
What Factors Affect Property Yield
Saying “everything is a factor” would be true, but that’s not helpful. When we talk about how to calculate yield, we can look at how it can develop in two ways: gross and net. Both are estimations of how much profit you’ll have either gained or lost by the end of the year.

Gross Yield vs Net Yield
Tenants
Repairs and Running Costs
How to Calculate Yield

There are two different calculations to perform if you want to find either your gross or net yield. Successful management of your properties requires an authoritative grasp on your potential returns by the end of the year. Knowing all of your property yield outcomes will help you achieve the highest return at the end of the year.
Both the gross and net yield calculations return as percentages. When learning how to calculate yield, you will be comparing everything against the initial market value of the property when you purchased it. For example, if you purchased a property for $150,000, then every property yield will be working toward covering that cost, so to speak.
Calculating Gross Property Yield
Calculating Net Property Yield
Why Is Knowing Your Property Yield Good
It’s simple really. It all comes down to evaluation and planning. Real estate is in constant demand across the United States, and that demand has a heavy effect on your yield when you’re purchasing a property. High demand for real estate means that you’ll need to pay more to invest in a property, and that will impact your overall return. However, vice versa, in times when properties are not in demand, you’ll gain the benefit by purchasing real estate at a lower asking price and increasing your overall return. Regardless of when you’re looking at a new property, you need to make sure you have a plan in place to account for your expense. Frankly, real estate is expensive, and you want to pay off that expenditure as quickly as possible. If you know what your gross and net yields are going to be, then you’ll have better game plan ready for when you begin leasing or renting out your space. Make sure you’ve calculated your expenditures, your returns, and your liabilities before making any decisions.