The formula to calculate the Rental Yield is:
\[ RY = \left( \frac{I - E}{PV} \right) \times 100 \]
Where:
A rental yield is defined as the ratio of the annual net profit generated from a property with respect to its current or purchase value. It is a measure used by property investors to assess the profitability of their investment. A higher rental yield indicates a more profitable investment.
Let's assume the following values:
Using the formula:
\[ RY = \left( \frac{24000 - 6000}{300000} \right) \times 100 = \left( \frac{18000}{300000} \right) \times 100 = 6\% \]
The Rental Yield is 6%.
