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Rental yields are probably the most important investment metric used by landlords investing in residential investment property. It is an indication of the level of return on an investment.
The rental yield is calculated by measuring the annualised value of rents as a percentage of the underlying capital value of the buy-to-let investment.
Please see example below:
For a property valued at £100,000
Suggested Monthly rent = £550
Annual rent = £550 x 12 = £6600
Gross rental yield = (£6600 / 100,000) x 100
