This month's issue has an article focusing on the USA and on some high and low yield locations that might be found there. Comparing the USA and the UK can be a challenge. What is paid by the tenant or paid by the landlord can swing the returns achieved. There are also other issues to think about such as relative differences in the respective currencies. Having spoken recently with a UK investor living in Canada, he highlighted to me how Canada looks cheap right now for the UK investor. This is a double edged sword. Five years ago, Steve's friend bought a Canadian property that throws off strong cash flow. He bought it at a time when Sterling was strong. In effect, he bought more property that he would have otherwise. Now the investor wants to sell. He is long the Canadian Dollar but as Sterling is strong again the investor is resisting converting the money back to Sterling. Mentally, the investor has switched from focusing on real estate to being a currency speculator. Moving from something he can control to something he cannot control.

I have consistently said for years that gross yield is a bogus indicator. What makes it bogus is you get too many false positives and false negatives. What does that mean? The 'signal' represented by the yield is not reliable. The only argument for using gross yield is the calculation is easy to perform. It is simple yet often wrong.