Value
Net initial yield
Yield after deducting the owner's expenses.
For the net initial yield, the owner's expenses, such as maintenance, insurance, management and non-recoverable service charges, are deducted from the gross rent. The net initial yield gives a more realistic picture of the investment return than the gross initial yield.
See also
Commercial property valuationFrequently asked questions about Net initial yield
What does Net initial yield mean?
Yield after deducting the owner's expenses.
How does Net initial yield work in commercial real estate?
For the net initial yield, the owner's expenses, such as maintenance, insurance, management and non-recoverable service charges, are deducted from the gross rent. The net initial yield gives a more realistic picture of the investment return than the gross initial yield.
Related terms in value
Gross initial yield
Gross rent divided by the investment.
Commercial property valuation
Formal valuation by a valuer.
Rental capitalisation method
Valuation method based on rental income.
DCF method (discounted cash flow)
Valuation based on future cash flows.
Letting potential
The extent to which a property can be let quickly and at a market rent.
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