What is Rental Yield?
Rental yield is the annual income generated by a property as a percentage of its value — the key metric for measuring real estate investment efficiency.
Gross vs Net Yield
Gross Yield = (Monthly Rent × 12) / Property Value × 100
Net Yield = (Annual Rent - Annual Expenses) / Property Value × 100
Practical Example: Riyadh Apartment
- Property value: 800,000 SAR
- Monthly rent: 5,000 SAR
- Gross yield: 7.5%
- Annual expenses: 8,000 SAR
- Net yield: 6.5%
Good Yield in Saudi Arabia
A good net rental yield ranges between 6% and 9% annually. Riyadh and Jeddah typically yield 5.5%–7.5%, while smaller cities can reach 10% with higher vacancy risk.