Yield

Yield is the income a property generates as a percentage of its cost or value. The common measures are the cap rate (net operating income over price) and cash-on-cash return (annual cash flow over the equity invested), both useful for comparing opportunities.

Yield is one of the clearest reads on how an income property is performing. A higher yield usually comes with higher risk or a lower-quality asset, while a lower yield tends to track stable, well-located property in core markets. The work for an investor is balancing yield against risk tolerance and the prospect of long-term appreciation.