Gross yield
Annual rent divided by property value. Quick top-line return number.
Gross rental yield is the annual rental income divided by the property value (or purchase price), expressed as a percentage. It's the back-of-envelope return number agents and listings use because it's quick to calculate and easy to compare across listings. Australian residential gross yields typically run 2.5-3.5% in the major capital cities and 4-7% in regional markets, with rural and remote pushing higher. Gross yield ignores running costs entirely, so a 6% gross yield in a high-strata, high-vacancy area can easily turn into a 1-2% net yield once you strip out levies, management, insurance, repairs, and vacancy.
Worked example
A $500,000 property renting at $500/week earns $26,000/year. Gross yield = 26,000 / 500,000 = 5.2%.
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