So you have a rental property. It’s in a great area with huge potential for growth. There’s little to do by way of maintenance, and you’re more than happy to just sit on it for a few years to see what it does. But you also want to know how much it will make you – what’s the return of investment on your investment property? How do you calculate it? And will you be able to retire when you want, with the lifestyle you want?

While we can’t help you with retirement age and lifestyle, we can give you some pointers on your return on investment. You’ll have heard the term “yield”. That’s basically how much money an asset makes, expressed as a percentage of the asset’s worth. When referring to a rental property, yield is the rental income as a percentage of the value of the property. You can calculate it be