Real Estate Glossary

What is Yield Rate?

Yield rate, also known as the yield, is a measure of the return on an investment, typically expressed as a percentage of the investment's cost. In real estate, yield rate is used to measure the performance of rental properties and is calculated by dividing the annual rental income by the property's value. For example, if a property generates $12,000 in annual rental income and has a value of $300,000, the yield rate would be 4% (12000/300000). A higher yield rate generally indicates a better return on investment, however, it's important to take into consideration the property's expenses, taxes, vacancy rate, and future market conditions.