How do you calculate the rental yield of a property in the UK?

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To calculate the rental yield of a property, you will need:

  • The likely yearly rental income
  • The value of the property

The rental yield is then calculated by dividing the rental income by the value of the property and multiplying it by 100 to obtain a percentage.

To calculate the net rental yield of a property, you will also need:

  • The costs associated with renting the property (e.g. letting agent fees, legal, utilities if applicable, ...)
  • The potential costs associated with purchasing the property (e.g. mortgage payments, ...)
  • Taxes associated with renting the property

The net rental yield is obtained by dividing the difference between the rental income and the sum of all the costs with the value of the property. You can then multiply the result by 100 to obtain a percentage.

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