Up to this point, we’ve been talking about rental yield in the most basic of terms using just rent and purchase prices to calculate the rental yield percentage.
However, if you want a more 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.
Net rental yields are often favoured as they’re more accurate than gross yields. However, gross rental yields are easier for investors to calculate themselves.
Added costs that are factored into a net rental yield include maintenance costs, agent or management fees, mortgage repayments, and taxes like mortgage tax and stamp duty.
When working out net rental yield, you may also need to factor in the possibility of void periods where your property isn’t being occupied.
To be on the safe side, account for a month or two of rental loss so that you’re more prepared if you do encounter void periods.
The net rental yield can be difficult to calculate if you don’t already own the property or know the exact costs involved.
At RWinvest, we provide details on the net income for each of our investment opportunities.
This way, you’re able to find a high yield property more quickly and easily than if you had to manually work out the rental yields yourself.
With us, you can expect to find properties with net rental yields up to 8%, which is some of the highest yield property UK figures.