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Question
What is the difference between gross yield and net yield, and why does it matter?
1
Net yield includes mortgage payments while gross yield does not; net yield is therefore lower for financed properties
2
Gross yield uses market rent while net yield uses actual rent received; the difference matters for vacancy analysis
3
Gross yield measures income relative to purchase price without deducting costs; net yield deducts all operating costs — the difference reveals the true income return after expenses such as management fees, insurance, maintenance, and voids
4
Gross yield is calculated monthly while net yield is calculated annually; they measure the same underlying metric at different time horizons
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