Yield

Yield is the income an investment produces, expressed as a percentage of its price or value. For rentals, gross yield is annual rent divided by price. It is the inverse of the gross rent multiplier. A GRM of 10.4 is a gross yield of 9.6%, and the two numbers carry the same information.

Markets that quote gross yield, common in the UK and Australia, are using GRM turned upside down. Converting is simple: divide 1 by the GRM, or divide 1 by the yield. A 12 GRM is an 8.3% gross yield. A 5% yield is a GRM of 20.

Net yield subtracts operating expenses before dividing, which makes it the same number as the cap rate. On the $500,000 example with 5% vacancy and expenses at 36% of collected rent, gross yield is 9.6% and net yield is about 5.8%. The gap between the two is the part of the rent GRM never sees.

Further reading: Yield on Wikipedia.