How to Calculate Rental Yield on Commercial Property
Gross yield, net yield and payback period — three formulas and a real worked example.
Three numbers are enough to assess a commercial unit.
Gross yield = (annual rent / purchase price) × 100. Simple, but it ignores costs. Net yield = ((annual rent − annual costs) / purchase price) × 100, where costs include service charges, property tax, insurance, void periods and maintenance. Void risk is higher in commercial than residential property, so deducting roughly one month of rent as a void allowance is realistic. Payback period = purchase price / annual net rent.
In Türkiye, 12–18 years is considered normal for commercial property. Under 10 years is either an unusually good opportunity or a risk you have not yet spotted.
Worked example: a unit of 85.78 m² bought for 6,150,000 TL and let at 62,000 TL per month produces 744,000 TL a year — a gross yield of 12.1%. After 90,000 TL of annual costs and a one-month void allowance, net rent is 592,000 TL, the net yield is 9.6% and the payback period is about 10.4 years.
Always compare using net yield. Gross yield does not let you place two units with different cost structures side by side.