Quick Answer — Gross Yield vs Net Yield
Gross yield = Annual rent ÷ Purchase price × 100. It's the number you'll see quoted most often because it takes ten seconds to calculate, and it's genuinely useful for a first-pass comparison across many listings.
Net yield = (Annual rent − Vacancy loss − All operating expenses) ÷ Purchase price × 100. This is the number that actually reflects what the property returns, and it is reliably lower than gross yield — often meaningfully so.
Quick reference: a $300,000 property renting for $2,000/month has a gross yield of exactly 8%. Once you subtract a realistic 5% vacancy allowance, property tax, insurance, maintenance, and an 8% management fee, the net yield on that same property drops to about 4.79% — a gap of over 3 percentage points, entirely from costs the gross figure ignores.
US residential rental yields typically run 4-8% gross depending on market, with net yield running 30-50% below the gross figure once realistic expenses are applied. If a listing only advertises gross yield, treat it as a screening number, not a return estimate.