Combine rent, vacancy, operating expenses, financing and acquisition costs in one rental-property estimate.
Estimated net rental yield before tax.
Gross yield divides scheduled annual rent by purchase price. Net yield uses rent after vacancy and operating expenses. Cash flow also subtracts mortgage payments, while cash-on-cash return compares annual cash flow with the initial cash invested.
A positive cash flow means estimated rent covers operating expenses and debt payments under these assumptions. Taxes, major renovations, price changes and financing fees are not included unless entered in annual expenses or acquisition costs.
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Gross yield uses scheduled rent only. Net yield deducts estimated vacancy and annual operating expenses before comparing income with the total acquisition cost.
