investment competes with other financial investments Valuers Gold Coast in other words as investor I might have half a million dollars to invest and I’ll be wondering whether to buy government bonds or shares in a company or maybe an item of property and so the item of property must be able to be compared in some way and evaluated against these competing investments and this is where yield is so useful
because yield gives you a rate of return which can be related to the rates of return on money loans and also on profits on business ventures and so yield already is an attractive comparator of investment value and so by using yield we find that we’re able to more readily understand property as an investment object now if we know the yield that’s operating in a particular property market and we know the rent we get the capital value simply by dividing the rent the return the net
operating income by the yield and that’s exactly what the income approach is very very simply in this second last bullet point here capital value or the sale price of land equals the return as in the rent divided by the yield this means that we started to go to the market to find the rental value of the property we tend to do that by looking at comparable investment properties and what their rental value is likely to be what we’d be able to rent them for at least and for we also go to the market to find the yield nice thing about going to the market for these two factors even though it appears
to be a sales comparison approach we don’t have to go to exactly the same kinds of property to look at the yields in fact we don’t have to go to properties which are so close to identical to look at the rental value either all we have to is ask the question will this property rent for more or less than the property next door across the road or down the street where we’re not looking at the property being physically comparable that simply being similarly attractive in terms of its ability to attract red likewise in terms of yield we can calculate the yield by looking at comparable properties which currently