Gross and net rental yield
Compare annual rent with the purchase price and total investment. In all four UK nations net yield uses rent collected less owner expenses before borrowing and income tax.
Worked example
Eleven months at £900 less £1,800 costs gives £8,100. On £225,000 invested the net yield is 3.60%.
Gross yield assumes twelve fully paid months. For net yield, add purchase tax, fees and initial works to the price and use the expected occupied months. HMRC rental income records
