What is an example of yield in a coliving scenario?

In a coliving scenario, yield is a crucial metric that helps investors evaluate the potential profitability of a property based on its rental income relative to its value. Yield is typically calculated by taking the annual rental income and dividing it by the property value, then expressing it as a percentage.

In the provided example, the annual rent is €200,000 for a property valued at €4,000,000. To calculate the yield, you would divide the annual rent (€200,000) by the property value (€4,000,000) and then multiply by 100 to get a percentage.

So, the calculation is:

[

\text{Yield} = \left( \frac{\text{Annual Rent}}{\text{Property Value}} \right) \times 100 = \left( \frac{200,000}{4,000,000} \right) \times 100 = 5%

]

This calculation shows that the yield in this scenario is indeed 5%, accurately reflecting the relationship between income and property value, which is a key consideration in the coliving investment strategy.

Other scenarios, while they may present interesting figures, do not properly illustrate yield in the exact context needed. For instance, the