Yield

Question 1

What factors would you considering when determining a yield?

Answer 1

• Prospects for rental and capital growth
• Quality of location and covenant
• Use of the property
• Lease terms
• Obsolescence
• Voids
• Security and regularity of income
• Liquidity

Question 2

What is an All Risks yield?

Answer 2

Yield which encompasses all the prospects and risks attached to a particular investment

Question 3

What is a True yield?

Answer 3

Assumed rent is paid in advance (traditional valuation practice assumes rent is paid in arrears)

Question 4

What is a Nominal yield?

Answer 4

Initial yield assuming rent is paid in arrears

Question 5

What is a Gross yield?

Answer 5

Yield based on the net purchase price (i.e. not adjusted for purchasers’ costs)

Question 6

What is a Net yield?

Answer 6

Yield based on the gross purchase price (i.e adjusted for purchasers’ costs)

Question 7

What is an Equivalent yield?

Answer 7

Average time weighted yield reversionary property is valued using an initial and reversionary yield

Question 8

What is an Initial yield?

Answer 8

Simple income yield for current income and current price

Question 9

What is a Reversionary yield?

Answer 9

Market Rent divided by current price on an investment that is under rented

Question 10

What is a Running yield?

Answer 10

Yield at one moment in time