Gross Yield
Also known as: gross rental yield
Rental income divided by property price, before any expenses. The quickest (but crudest) measure of a property's cash return.
Formula
Gross Yield % = (Weekly Rent x 52) / Property Price x 100Gross yield is the raw income-to-price ratio of a property investment. It's calculated as annual rent divided by the property's purchase price (or current market value), expressed as a percentage. A property that rents for $500 per week and sells for $600,000 has a gross yield of 4.33%.
Gross yield is useful because it's simple and consistent. Every property in a market can be compared on the same basis without needing knowledge of local expenses or individual investor circumstances. It's what most real estate listing sites publish when they quote a "yield".
The limitation is that it ignores everything an investor actually pays: council rates, insurance, strata fees, property management, maintenance, and vacancy. In Australia, these expenses typically eat 1.5 to 2.5 percentage points of gross yield. A 5% gross yield is often a ~3% net yield, still valuable information, but a different story.
Related terms
Rental Yield
The annual rental income from a property expressed as a percentage of its purchase price. The fastest way to gauge whether a property will cover its own costs.
Net Yield
Rental yield after subtracting operating expenses. A more realistic measure of what the property returns in practice.
Cashflow
The net cash a property generates or consumes after all income and expenses: the working-capital truth of an investment.
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Suburbs and properties on PropRadar are analysed using the metrics in this glossary.
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