it’s not a rule. It’s just a quick way of calculating if your property is going to be cashflow positive at 10.4 percent (I use it as a minimum yield where the rent should cover the mortgage plus costs. You could be CF+ve with a lesser yield with depreciation etc but it’s not a given – yields over 10 percent should be well and truly CF+ve)
You are welcome to calculate it the slow painful way i.e. 50K property, rents for 100 per week, 100 times 52 weeks is 5200,
divided by purchase price of 50K equals 10.4 percent yield…..
see the eleven second solution means you could have done that at a glance without the calculator….
however do it with the calculator a few times and it’ll become intuitive!
it’s not a rule. It’s just a quick way of calculating if your property is going to be cashflow positive at 10.4 percent (meaning rent should cover the mortgage plus costs.)
You are welcome to calculate it the slow painful way i.e. 50K property, rents for 100 per week, 100 times 52 weeks is 5200,
divided by purchase price of 50K equals 10.4 percent yield…..
see the eleven second solution means you could have done that at a glance without the calculator….
however do it with the calculator a few times and it’ll become intuitive!
it’s not a rule. It’s just a quick way of calculating if your property is going to be cashflow positive at 10.4 percent (meaning rent should cover the mortgage plus costs.)
You are welcome to calculate it the slow painful way i.e. 50K property, rents for 100 per week, 100 times 52 weeks is 5200,
divided by purchase price of 50K equals 10.4 percent yield…..
see the eleven second solution means you could have done that at a glance without the calculator….
however do it with the calculator a few times and it’ll become intuitive!