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What is Yield on Cost?

Yield on Cost (YoC) evaluates investment returns based on total acquisition and renovation expenses.

  • Formula: Annual Net Operating Income ÷ Total Investment Cost.
  • Project Viability: Determines if upgrades justify expenses.
  • Risk Assessment: Helps compare against market yields.
  • Long-Term Planning: Guides future pricing and exit strategies.

A strong Yield on Cost ensures profitable asset performance.

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