High-Yield Property Sourcing: Compare Rental Deal Economics

Gross yield, net income and cash flow are different

Gross yield compares annual rent with purchase price. For an existing let, distinguish contracted rent from cash actually collected. For a proposed let, record where the rent estimate comes from and when it was checked.

Compare operating income after vacancy, management, maintenance, insurance and owner-paid bills with the full acquisition and works budget. State the denominator and cost exclusions. Finance and tax need separate treatment with the appropriate advisers: two figures both called net yield may not measure the same thing.

Location selection should follow property evidence

Compare the actual street, condition, tenant profile and similar lettings.

Stress-test lower rent, longer vacancy and higher costs. Include an exit question: who could buy the finished asset, and which assumptions would affect its saleability? No fixed yield, full occupancy or profitable outcome is promised.

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