Valuation - Yield Definitions Flashcards
All risks yield
The remunerative rate of interest used in the valuation of fully let property let at market rent reflecting all the prospects and risks attached to the particular investment
Example sentence: The all risks yield for the property was calculated at 5%.
True yield
Assumes rent is paid in advance not in arrears (traditional valuation practice assumes rent is paid in arrears)
Additional information: True yield is also known as the reversionary yield.
Nominal yield
Initial yield assuming rent is paid in arrears
Gross yield
The yield not adjusted for purchasers’ costs (such as an auction result)
Net yield
The resulting yield adjusted for purchasers’ costs
Equivalent yield
Average weighted yield when a reversionary property is valued using an initial and reversionary yield
Initial yield
Simple income yield for current income and current price
Reversionary yield
Market rent (MR) divided by current price on an investment let at a rent below the MR
Running yield
The yield at one moment in time
