Yield
Yield measures income return on an investment property. Learn how to calculate gross and net yields for real estate investments.
Definition
Yield refers to the income return on an investment, expressed as a percentage of its cost. In real estate, yield can be calculated as gross rental yield—annual rental income divided by the property’s purchase price—or net yield, which subtracts operating expenses (maintenance, insurance, taxes) from rental income before dividing by purchase price. Yield helps investors compare potential returns across properties and other asset classes. Higher yields indicate greater cash flow relative to investment, but may accompany higher risk or lower property appreciation.
Why It Matters
Yield often affects pricing, lending, title, zoning, or escrow procedures. Sellers benefit from understanding it to set clear expectations, while buyers gain confidence in budgeting and due diligence.
Examples
Example 1: A seller references yield in the listing notes or disclosures.
Example 2: A buyer checks yield alongside comps, loan terms, or HOA documents before making an offer.
Example 3: Escrow or title ensures yield compliance before recording the transaction.
Tips
Ask how yield might influence financing, contracts, or title.
Document related issues clearly to prevent disputes.
Use a flat fee multiple listingto cut costs and still gain MLS exposure.
Additional Context
Yield is frequently connected to other real estate steps such as financing, zoning approvals, appraisals, and contract contingencies. Surfacing these issues early and documenting them in writing helps keep both sides aligned.
Related Terms
Qualifying Ratio
Qualifying ratios compare debt to income for mortgage approval. Understand front-end and back-end ra...
Quiet Title Action
A quiet title action is a lawsuit to clear title disputes. Learn when to use quiet title actions to ...
Quitclaim Deed
A quitclaim deed transfers any interest without warranties. Learn when quitclaim deeds are used and ...
Quorum (HOA)
Real Estate Investment Trust (REIT)
Ready to Use Your Real Estate Knowledge?
Now that you understand Yield, let Wayber help you navigate your real estate journey. Our flat-fee service saves you thousands while providing expert guidance.