Valuation Basics – Free Cash Flow Yields
Say you were buying a house as an investment. It costs £200,000 and you plan to rent it out at £1000 per month which comes to £12,000 per year. The return you get annually from this property (your yield) is £12,000/£200,000 = 6%. You are making a gross return of 6% on the £200,000 investment. […]