Reading Rental Yield Before You Buy

When a rental yield figure is quoted, it matters whether it's gross or net of operating costs — the gap between the two can easily exceed a full percentage point.

Questions worth asking before relying on a yield figure

• Is the quoted figure gross or net?
• What occupancy assumption sits behind it?
• Does the cost basis include service and maintenance fees?
• How has yield moved on comparable projects over the past 3 years?

A number alone isn't enough to base an investment decision on — the context behind it is what determines the quality of the opportunity.

Khalid Al-Zahrani, Real Estate Investment Advisor