Reading the Numbers: Yield, Costs and What to Watch

Property presentations often speak of yield, occupancy and appreciation. These terms are useful, but alone they often say little.

Gross and Net Are Not the Same

Gross income is the amount before costs. Net income is what remains after management fees, upkeep, taxes, insurance and empty periods are taken into account. Confusing the two can make expectations look higher than they are.

Every Figure Rests on an Assumption

• Which period does it cover? A past year, or a forecast?
• What occupancy was assumed?
• Which costs are included and which are left out?
• Who states the figure and what do they base it on?

Commitments and Forecasts

Some developers may commit to rental income for a set period. That is a developer statement; Anavesta does not guarantee it. The length and terms of the commitment, and the financial strength of the party giving it, should be examined in writing. Forecasts are only estimates.

What Changes Over Time

Tax rules, regulations for foreign buyers, exchange rates and demand all change. A figure today may not hold tomorrow.

Before trusting a number, ask for its story.

This is not investment advice. Please do your own research and take the view of an independent financial adviser.

This article is general information, not investment, legal or tax advice. Figures and regulations change often; do your own research and take independent advice before deciding.

Brands mentioned are not affiliated with Anavesta unless stated.