Yield is the income return on an investment, usually expressed as an annual percentage.
Yield is a broad term and can describe different measures, such as cap rate, cash-on-cash return, or yield to maturity on a bond. In NNN investing, people often use it to mean the annual income return relative to the price paid. Because the term is used loosely, always clarify which measure is meant, and whether it is before or after financing. Compare yields on the same basis when evaluating properties.
Valuation & Returns
Gross income minus operating expenses, before debt service and income taxes.
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Annual pre-tax cash flow divided by total cash invested — the return on the equity actually put into a deal.
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Net operating income divided by purchase price; the standard yardstick for pricing NNN properties.
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