Gross yield is the simplest measure — annual rent divided by purchase price. It gives a quick comparison between properties but does not account for the costs of ownership. Net yield subtracts operating expenses (maintenance, insurance, property tax, management fees, vacancy) to show your true income return.

A good rental yield depends on market and strategy. In most markets, gross yields of 5-8% are considered solid for residential property. Net yields of 3-5% after all expenses are typical for well-located properties. Higher yields (8%+) often come with higher risk — less desirable areas, older properties, or less reliable tenants.

Tax considerations can significantly impact your actual returns. Rental income is taxable, but you can often deduct mortgage interest, depreciation, maintenance, and management fees. Consult a tax professional in your jurisdiction to understand how rental income affects your overall tax position.