Before I start, I should mention my easy Rental Yield Calculator here so you can verify any investment property yield quickly.
Whenever you are researching an investment property to buy, it is important to determine the rental yield (sometimes known as rental return) of the property. The rental yield will be a big factor in how much cash-flow you receive (or lose) whilst owning the property.
So what is rental yield and how to calculate rental yield? Rental yield is simply a ratio that shows the amount of rental income received in a year relative to the purchase price of the property. For example, if your property would rent for $1000 per month, you would times that by 12 to get the annual income figure of $12,000.