What Is Years' Purchase?
Years' purchase is a traditional valuation multiplier equal to 1 divided by the yield, representing the number of years of net rental income it would take to recoup the purchase price at that yield.
Formula
Years' Purchase = 1 ÷ Yield
Example
At a 5% yield, years' purchase is 1 ÷ 0.05 = 20 — meaning the price equals 20 times the annual net income.