JAPAN INVESTMENT PROPERTY GUIDE

Provident Investment has prepared a guide to provide investors with some useful information when considering to purchase property in Japan

Gross YIELD

A very common financial metric used in real estate investment is Gross Yield, which is defined as the amount of income a property can generate (i.e. rental income) in a given year divided by the total asking price of the property. This is used to give the buyer a sense of how much money can be potentially made off of a given property investment if the property is rented out at full capacity under the best possible circumstances, and it is usually expressed as a percentage.

Gross Yield = (Annual Income) / (Asking Price) 

For example, consider an investment condo property in Tokyo being sold for JPY28M, and rents at JPY1.2M per year.
The gross yield would be calculated as: 

Gross Yield = 1.2M / 28M
Gross Yield = 4.29%
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References
https://www.investopedia.com/terms/g/gross-yield.asp