I don’t understand exactly what is meant by a yield figure, like I know that yield is a measurement of your annual income from the property, but how is it calculated?
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Hi,
Yield is a fancy return for return.
In property investing there are two yields that most people watch:
1. Capital Gains Yield:
Annual Capital Gain / (Purchase Price + Closing Costs)
2. Cashflow Yield
Annual Cashflow / (Purchase Price + Closing Costs)
These figures, when combined, give you the ROI (Return on your investment).
Me, I focus on a slightly different yield – called the Cash on Cash (CoC) return.
I look at how much cash I need to put down for how much cashflow return I’ll get back.
Why? Because in the world of financial independence you want cashflow returns to sustitute for the income that you’d otherwise earn in a job.
If you want to stop working, ROI is ‘pie in the sky’ if your investment keeps you in a job.
This is the difference between what you are worth on paper, and what your money buys in reality.
Bye
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Ah, right, thanks. That certainly makes sense, considering the cash on cash. I also am after immediate cashflow, rather than very long term money that may as well be a dream for how real it seems.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098
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