Why is rental yield important?

Rental yield is important for several reasons. First, it provides an indication of the potential income that can be generated from a property investment. A higher rental yield means a higher return on investment, which can make a property investment more attractive.

Second, rental yield can help investors compare different properties and make informed decisions about which properties to invest in. By comparing the rental yields of different properties, investors can identify which properties offer the best return on investment.

Third, rental yield can help investors determine the price they're willing to pay for a property. If a property has a low rental yield, it may not be worth the asking price. Conversely, if a property has a high rental yield, investors may be willing to pay a premium for it.

Factors

Several factors can impact the rental yield of a property. These include:

1. Location: Properties located in areas with high demand for rental properties, such as near universities or in city centres, are likely to have higher rental yields.
2. Property Type: Different types of properties, such as apartments or houses, may have different rental yields.
3. Rent Prices: The amount of rent charged for a property can impact its rental yield.
4. Vacancy Rates: High vacancy rates can impact the rental yield of a property by reducing the amount of rental income generated.

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