What is a Yield?

When looking to head into property investment, you might start to come across some new terminology that might be new to you. One of those terms is the word ‘yield’.

In short, a ‘yield’ within the property investment world, is the money you’ll make back on your property given as a percentage. Of course, it is not an exact amount, as the figure can vary depending on how well you do in terms of renting out your property but it gives you a rough idea of what money you can potentially expect to make. 

How is it worked out? 

Put simply, if your property was rented out at £250 a week, the annual rate would be 52 times that, or £13,000. To work out the yield you would then need to establish what £13,000 is as a percentage against the cost of the property. If your property cost £170,000, the yield would therefore be 7.65% at gross. You’ll get your net rate once you pay off any management fees, interest, maintenance costs, etc. which has to be budgeted to show a true yield….

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To reiterate, this figure is a rough estimate and purely depends on the rentability of your investment. 

What is a good yield? 

Of course, you want to ensure that your investment is going to comfortably make a worth-while profit. A good yield of around 5-8% will give you enough money to cover all your expenses as well as give you a reasonable return on your investment.

Take a look at some of our developments and holiday lodges with starting rates of 8% rental return per annum. By establishing what a good yield looks like, you’ll be able to forecast your annual return on investment and start to see the benefits pay off. 

Contact us today to find out how we can help create a personal and assured investment, tailored for you.
T: (+44) 0113 833 0780
E:  info@holmeshaw.com

Holmeshaw, providing confidence in your investment since 2019.