Gross yield, also called gross rental yield, is a simple return metric that expresses a property's annual gross rental income as a percentage of its value or purchase price. It is calculated as annual gross rental income divided by property value, multiplied by 100; for example, a property generating $24,000 a year and worth $400,000 has a 6 percent gross yield. Because it ignores operating expenses, taxes, financing, and vacancies, gross yield is a quick screening tool rather than a measure of actual profitability, and it typically overstates real returns. Investors often compare gross yield with net yield or cap rate, which factor in costs, to get a fuller picture. Tracking accurate rental income across channels, which a platform like Hostaway can consolidate, makes gross yield calculations more reliable.
Why this matters for property managers
Because it reduces a property to a single percentage, it makes markets and listings quick to compare when screening acquisitions. That simplicity is also its weakness: it ignores costs, financing, and vacancy, so two homes with identical yields can deliver very different returns. Treat it as a first filter, then dig into net figures before committing capital.
Frequently Asked Questions
How do I calculate gross yield?
What is the difference between gross yield and net yield?
Is a higher gross yield always better?
What is a good gross yield for a short-term rental?
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