Real Estate Blog

Annual Rental Yield – Online Broosco Tools

11 Jun 2022

Market, by Broosco Team

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Free online tools that enable you to easily, quickly and accurately calculate performance indicators of your property or properties that you may be interested in. Use Broosco annual rental yield calculator that allows you to work out the gross and net annual yield of a property.

 

Yield as a concept in the economy is associated with the production of added value and is always presented as a  percentage. In case you are considering investing in a property to get a rent, it is a good idea to first calculate the return on such an investment. So how do you determine the return on your investment in a property?

The yield of a property is affected by two factors:

  • The capital return of a property in the long run
  • The income return of the property (rent yield )

 

Capital Return

Capital return is affected by fluctuations in the real estate market. For example, if last year you bought a property at € 100,000 and this year its commercial value is estimated at € 115,000, the capital return of the property amounts to 15% ((115,000-100,000) /100,000). It is not easy to calculate as it requires knowledge of valuation techniques and access to databases.

 

Rent Yield

Conversely rental yield is much easier to calculate. In its simplest form, to calculate the rental yield on a property the old-fashioned way, you’ll need to divide the annual rental income by the price you’ve paid for the property and then multiply this figure by 100. This is the main reason why this index is widely used in order to quickly understand whether a property investment based on the rental yield is good or not. This indicator is very general and does not take into account many important parameters. However, its use makes sense when we want to compare two or more properties as the results it will produce may not be accurate but they are comparable.

 

Do you want more accurate results?

If you want to calculate the rental yield of a specific property more accurately, you should take into account the following parameters:

  • Taxes and expenses that accompany the purchase of a property (transfer tax, estate agent fees, lawyer’s fees, notary’s fees )
  • Annual income taxes from rent
  • Annual property tax (in Greece is called ENFIA)
  • The maintenance costs of the property

 

Free online rental yield calculator

In order to make your life easier Broosco offers you an easy to use online tool, the Annual Rental Yield Calculator. Using this tool you are just three clicks away from making an accurate calculation of the income return of the property you are considering buying, or you already possess. Good luck!

 

Annual Rental Yield Calculator

 

 


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