Rental Yield
Also called: gross yield, net rental yield, yield on property
Rental yield is annual rent as a percentage of a property's value — gross before costs, net after them. The gap between the two is wider than most new landlords expect: management, maintenance, insurance, tax and vacancy typically consume 30–45% of gross rent. A 7% gross yield is often a 4% net yield, before any mortgage payment.
Formula
Net rental yield = (Annual rent − Annual costs) ÷ Property value