Assessing a property’s profitability before purchase is vital for making a wise investment. Understanding its potential returns through factors like rental yield and future appreciation helps buyers avoid financial strain and choose properties that align with their goals. It ensures that the selected house or apartment meets immediate needs while promising solid returns over time.
Here’s why in this article we will talk about what is rental yield, how to calculate it and where to find this information inside CASAFARI.
What is rental yield and why is it important for investors?
Rental yield is a fundamental metric used by property investors to assess the profitability of a real estate investment. It represents the annual income generated from a property, usually expressed as a percentage of its value.
And while a high rental yield indicates greater potential profitability, a lower one might signify lower returns or higher costs relative to the property’s value. This makes rental yield a metric that aids property investors in comparing different properties and making informed investment decisions for maximum returns.
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For regular clients that are not investors themselves, the rental yield metric can also be beneficial when buying a property. Even if they don’t know if they’ll be living in a specific area for long, the clients can rest assured that buying their property is the right decision because that asset would be easily rented and bring back a desirable income in their absence.
As you might have understood already, it’s useful for the real estate professional to learn how to calculate the rental yield, in order to provide this information to a potential buyer client. Having access to this metric might increase the chances of them acquiring the property.
And CASAFARI can help you with that! Keep reading to see where you can find this information inside our platform.
What is a good rental yield?
So, after understanding the importance of this metric, you might be asking yourself what is a good rental yield on a property, right? The concept of a good rental yield varies significantly across different real estate markets, underscoring the importance for real estate professionals to comprehend these nuances.
Having access to the average rental yields for properties within that market allows professionals to make meaningful comparisons and guide buyers effectively.
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Where is the information about rental yields inside CASAFARI?
Did you know that it’s quite easy to find information about rental yields on our platform? This data is shown for active houses and apartments on the market that have at least 3 exact comparable properties, to ensure maximum accuracy.
At the moment, the rental yield information can be found within Property Pages of houses and apartments, inside our Property Sourcing, along with all other information about that specific asset.
You also get to filter on our Property Sourcing for properties with estimated rental yields within a desirable range. This ensures that you will only be looking at properties with great potential in terms of return of investment.
It’s important to remember that we’re talking about gross rental yield, meaning that this value assesses the potential return on investment before accounting for expenses like taxes, vacancies, or maintenance costs.
Estimated rental price: how much is the property currently worth?
Knowing how much to charge for rental on a property is a necessity to make sure the estimated rental yield is met and the investment is bringing the desired return. But this is a number that changes according to many factors, such as location, state of the property, the amenities it offers and the local market.
In order to make it easier for the property investor and estate agent to know how much to charge for rental on a property so the estimated rental yield is met, CASAFARI also took all of it into consideration and now shows the estimated rental price on the Property Page, right below the rental yield projection.
Now that you know the importance of assessing the rental yield of a property you’re trying to sell, the best way to go is start working with such data in mind, right? CASAFARI Property Sourcing is ready to help your business thrive with all the information you need to better advise your current and potential clients.
