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Glossary / Property

Void period

A void period is time during which a rental property has no paying tenant, and it is a cost rather than an absence of income because the service charge, mortgage and maintenance continue throughout.

A month of void on an annual tenancy is roughly eight percent of the year's rent. Two months is sixteen.

Any yield calculation without a vacancy allowance is assuming a tenancy that never gaps, never ends and never pays late.

Where people get it wrong

Modelling twelve months of rent. Even a well let unit turns over, and turnover has a gap in it.

The framework behind it Net rental yield sets out the rule, the arithmetic and where it breaks.

Read the framework

Related terms

Net rental yield Net rental yield is annual rent minus every running cost, divided by the purchase price plus every acquisition cost, which makes it the only yield figure that describes money actually reaching the owner. Gross rental yield Gross rental yield is annual rent divided by the purchase price, expressed as a percentage, before any running cost or acquisition cost is deducted.

Investments Playbook publishes educational research and general information. Nothing on this site is personal investment advice, a solicitation, or a recommendation to buy or sell any asset. Property and securities can fall in value. Past performance does not predict future returns. Figures shown are indicative and may be delayed. Always take regulated professional advice before acting.