Yield and factor - how can you recognise a worthwhile investment?

The two main indicators for an investment in a residential and commercial building are the yield on the one hand and the factor on the other. To calculate the Return (gross yield), the annual net cold rent is divided by the purchase price. This guideline value provides an initial point of reference for sounding out the available properties on the market and comparing them with each other. However, it should be borne in mind that this figure does not include non-apportionable operating costs or maintenance and refurbishment costs.

For properties with vacancies or potential for rent increases, a distinction is made between the current Actual yield and the target Target yield is differentiated. The higher the yield value, the more closely the location, condition and long-term security of rental income should be scrutinised. When choosing a location, it should also be borne in mind that the main part of the yield is usually realised at the end of the holding period when the property is sold, especially in metropolitan regions where demand is high.