Gross Yield Formula:

Monthly Rent x 12 = ANSWER 1
ANSWER 1 ÷ property value = ANSWER 2
ANSWER 2 x 100
Yield = ANSWER 3

EX: Rental based on R 3,600 p/m rental income

R3,600 x 12 = R43,200 – Annual Rental Income
R43,200 ÷ R420,000 (property Value)
0,102 x 100
Yield = 10.28%

Nett Yield Formula:

Monthly Rent x 12 = ANSWER 1
ANSWER 1 – annual expenses = ANSWER 2
ANSWER 2 / property value
Yield = ANSWER 3

R3,600 x 12 = R43,200 – Annual Rental Income
R43,200 – R15,000 = R28,200
R28,200 / R420,000 (property value)
0,067 x 100
Yield = 6,71%

NB: This expense is tax deductible.