Rental yield

Friday, 04 February 2011 12:11

Rental yield is the amount of money a landlord receives in rent over the course of one year, expressed as a percentage of the amount of money invested in the property.

For example, if a buy-to-let investor buys a house worth £200,000 - and tenants pay £10,000 a year in rent - the rental yield on the property would be five per cent. i.e. return (£10,000) divided by investment (£200,000) multiplied by 100 (to turn it into a percentage).

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