Investment Metrics
Void Allowance
Budget set aside for empty periods
Full Definition
Void allowance is the percentage of annual rent budgeted for empty periods between tenancies. Typically 4-8% (2-4 weeks per year). This should be deducted when calculating net yields. Higher void allowances are prudent for properties in less popular areas or with limited tenant pools.
Related Terms
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Analyse a PropertyMore Investment Metrics Terms
ROI (Return on Investment)
The percentage return on your property investment
Gross Yield
Annual rental income as a percentage of property price
Net Yield
Annual profit after expenses as a percentage of property price
Cash-on-Cash Return
Annual cash flow relative to cash invested
Capital Growth
Increase in property value over time