Can anyone clear something up for me. Is the annual rental yield the gross yearly rental income divided by the loan amount or by the pruchase price…. or do I just have no idea?
Hi muppet,
It’s a good point you make about net verses gross. I read an article the other day stating that most investment properties return an annual rental yield of around 2-3%. I am guessing this is due to them being negatively or neutrally geared??? However, this article also stated that to be able to continue to leaverage, Financial Institutions like to see an annual rental yield of >8%. It is for this reason I would like to make sure my calculations (formula) are correct on this. If there are any Morgage Brokers out there that could clear up, or shed some light on the yield issue, it would be greatly appreciated.
Thanks.
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