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A measure of the profitability of a rental property.
The gross yield is a useful metric for comparing the profitability of different rental properties, as it provides a simple way to compare the potential return on investment. However, it is important to note that the gross yield does not take into account expenses related to owning and maintaining the property, such as property taxes, insurance, and repairs, which can impact the overall profitability of the investment.
Gross yield is a useful metric when trying to compare the relative returns of various investments including bonds, mutual funds, and rental property. But for calculating the exact ROI that you can get as an investor for a real estate investment, the net yield is the metric that more accurately represents your gains.
The gross yield for MetaWealth™ real estate assets is calculated by dividing the annual rental income of a property by the purchase price or current market value of the property. For example, for our first real estate asset onboarded on the app, in Year 1 the projected annual rental income is €126,700 and the purchase price is €2,000,000 giving a Gross Yield of 6.33%.
Extra reading:
https://www.investopedia.com/terms/g/gross-yield.asp
https://www.stessa.com/blog/gross-yield-real-estate/
If you have any other questions please feel free to reach out to us using the contact us page.
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