Gross rental yield is calculated by dividing the annual rental income by the property purchase price and expressing it as a percentage. It does not account for expenses such as maintenance, management fees, or taxes.
Net rental yield, on the other hand, takes into account these additional expenses. It is calculated by subtracting the annual expenses from the annual rental income, then dividing it by the property purchase price, and expressing it as a percentage. Net rental yield provides a more accurate picture of the actual profitability of a rental property.