The Guide to Understanding Yields
If you’re keen to get the most out of your buy to let investment and want to find out more about yield on rental property, the following information could be of use to you.
Comparing your return against saving money in the bank and getting interest to property investment and collecting the rent as the income is a good way to consider if you are getting a good return on your property investment. If you are investing in property then you need to make sure that you are getting a better return, for the additional risk than simply leaving it in your bank.
Generally, a good rental yield is anything between 5% and 8% but they can be higher depending on the location. Rental yields can differ heavily between property type and location, with student properties typically offering the highest rental yields due to low house prices.
If you want an accurate view of exactly how your investment will perform including any outgoings, then you will need to consider gross rental yield vs net rental yield. Gross rental yield is everything before expenses, while net rental yield is the rental yield figure after expenses.