Gross yield can look better than reality

A simple gross yield uses annual rent divided by purchase price. It is useful for comparing projects, but it is not your final return.

Build a more realistic model

Subtract recurring costs such as maintenance, expected vacancy, management, repairs and other property-specific expenses. Then consider financing costs and taxes separately.

Ask one more question

Instead of asking only “What is the rental yield?”, ask:

“Who will actually rent this unit, for how long, and why would they choose it over the alternatives?”

That question often reveals more about investment quality than a headline percentage.