Since my previous posts I have been asked what the term 'Yield' means by a few people.
Yield is the annual return on your investment.
The way you calculate this is by expressing a years rental income as a percentage of how much the property cost.
For example:
Annual rental income = £7,200
Property price = £100,000
£7,200 divided by £100,000 = 7.2% yield.
Remember this is the gross yield, the net yield is after mortgage payments, repairs and running costs have been taken into account. More on this in my next post ....
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