Gross Rental Yield Calculation Question

[Anthony Parisi]

Gross Rental Yield: annual rental income divided by my property’s value/price (multiplied by 100 to get the percentage).  Where Property's value/price is comprised of the purchase price, all closing costs, and any renovation costs

Wondering when calculating my property's value/price do I include all closing costs or only those closing costs associated with closing the loan meaning do I also include prepays in my property price or only those costs that are one time expenses.  It seems half of my total closing costs were prepaid items, i.e. prepaid taxes, prepaid homeowners association for 1 year, prepaid interest.

Including all of these prepaid items decreases the gross yield if I include them.  Being a new long term buy and hold rental investor I am not sure what closing costs to include.  Appreciate the thoughts of seasoned investors.

Thanks

Gross rental yield for your rental property is its annual rental income divided by your property’s value/price (multiplied by 100 to get the percentage). The property’s price is comprised of the purchase price, all closing costs, and any renovation costsall closing costs in my