Rental yield is the rental income, as a percentage of a properties value. From the graphs below, you can see, it averages 3-4%. Its declined over the years as property value goes up (but rent does not directly follow property value).
Above 4%, you have a very high chance of creating a cash flow positive home.
Above 6%, you maybe be able to create a passive income.
Above 7%, you are likely to have strong lending options and a passive income.
In rare circumstances, you will have both strong rental yield and capital gain, but in the vast majority of cases, it will favour one or the other.
A strong rental yield, combined with a low vacancy rate, creates a cornerstone of a long term property strategy.
More than ever, the key manner to obtain a high rental yield is a dual income/dual key property.
Any questions on Rental Yield, ask us below. We’re happy to help!
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