The calculations I have done on a potential purchase has resulted int he below yield. Which one do i look at? Is is gross yield that most property reports report on?
Gross Rental Yield 4.67%
Net Rental Yield 3.47%
Net Rental Yield (after Interest) -3.73%Any further incite would be appreciated!
cheers
Most property repots state Gross yield as it's too complicated to compare Net yield (you need to know rent, strata fees, rates etc).
Units often have a higher Gross yield but deduct strata and it can be quite low.
I look at net yield as it shows the true yield./ But having said that I wouldn't buy anything that had any of your figures (unless it had development potential. I want 7% Gross minimum.
Gross yields tell no one anything useful as there are no outgoings considered. likewise interest and income tax is excluded as they vary widely depending upon personal circumstances.
net yields are the most useful as it takes into consideration all the applicable costs and makes comparing properties easier.
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