Updated October 2026 · Fraser Bond
Valuation · Yields
Equivalent yield, explained
| Measure | Formula | Tells you |
|---|---|---|
| Initial yield | Current rent ÷ price | Return today |
| Reversionary yield | ERV ÷ price | Return once rent moves to market |
| Equivalent yield | Single rate valuing both | Overall return from term and reversion |
Key commercial yield measures
A simplified annual-in-arrears term and reversion model, before purchase costs. Valuers may use quarterly in advance and include costs.
Passing rent below ERV: the yield rises as rent catches up.
Passing rent above ERV: income may fall at the next event.
Passing rent equals ERV: all three yields are similar.
Net yields deduct purchaser's costs.
Commercial investment with Fraser Bond
- Valuation and yield analysis
- Letting to secure income
- Lease management
- Sales to investors
Frequently asked questions
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Handy tools
Stamp duty calculatorRental yield calculatorMove-in costsBTL deposit calculatorRefurb cost per m²
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Is equivalent yield the same as IRR?
It is similar to an internal rate of return on the current and reversionary income, without growth.
When does equivalent yield matter most?
When passing rent differs from market rent.
Can Fraser Bond value my investment?
Yes.
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