How to Work out a Rental Yield
Calculate your total property costs., Calculate the gross rental yield., Calculate the net rental yield.
Step-by-Step Guide
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Step 1: Calculate your total property costs.
Add up the property purchase price, stamp duty (if applicable), renovation costs, closing fees, and any other property fees you may have. -
Step 2: Calculate the gross rental yield.
Take the amount of annual rent collected and divide it by the total cost of the property.
Multiply by 100 to get the percentage of gross rental yield. , The net rental yield will help you determine whether or not the property is a smart investment.
If calculations show you are paying too much for the property, you can re-evaluate your investment decision.
Calculate your annual expenses by adding up a year's worth of property repair costs, property taxes, landlord insurance, agent fees and hiring costs.
To calculate the net rental yield, subtract annual expenses from annual rent and divide this result by the total cost of the property.
The result should be multiplied by 100 for the net rental-yield percentage.
Knowing the net rental yield helps you plan ahead, because it provides insight on how much money to set aside for property upkeep and other expenses. -
Step 3: Calculate the net rental yield.
Detailed Guide
Add up the property purchase price, stamp duty (if applicable), renovation costs, closing fees, and any other property fees you may have.
Take the amount of annual rent collected and divide it by the total cost of the property.
Multiply by 100 to get the percentage of gross rental yield. , The net rental yield will help you determine whether or not the property is a smart investment.
If calculations show you are paying too much for the property, you can re-evaluate your investment decision.
Calculate your annual expenses by adding up a year's worth of property repair costs, property taxes, landlord insurance, agent fees and hiring costs.
To calculate the net rental yield, subtract annual expenses from annual rent and divide this result by the total cost of the property.
The result should be multiplied by 100 for the net rental-yield percentage.
Knowing the net rental yield helps you plan ahead, because it provides insight on how much money to set aside for property upkeep and other expenses.
About the Author
Justin Lopez
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