The " Surface Yield (Gross Rate of Return)" is the yield calculated based on the rental income of the reference month and does not include the expenses of the real estate investment such as monthly management fees and property taxes. Therefore, the actual yield after investing in real estate will be lower than the " Surface Yield."
The "surface yield" is calculated by multiplying the total rental income for any given month, as determined by the seller, by 12 to obtain the total expected rental income for the year. That amount can be divided by the property price and multiplied by 100 to get "XX%".
It is possible that vacancies will occur during the 12 months (1 year) after any given month determined by the seller, and that the total estimated rental income for the year will be less than the originally expected amount. Please pay special attention to this point.
Also, if there is a vacancy in the base month, the seller often calculates the rent based on an assumed rent only. Therefore, please be aware that that assumed rent may be higher than the market price.
Furthermore, the surface yield will go up and down depending on whether or not the consumption tax is included in the total estimated annual rental income and whether or not the seller's desired property price includes the consumption tax.