I am a newbie very new!!! [
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How do I work out my return on a property ie the percentage. [?]
If someone could also provide an example so I can follow it thru I would be very appreciative[]
I know I should know this but hey what can I say?[]If the good die young then I will live forever
Hi Eccles,
This is not a dumb question. Here goes!
To work out your gross return on a property:
1. Multiply the weekly rent by 52…ie..$150 x 52 = $7,800
2. Divide $7,800 into purchase price…ie..$75,000 = 10.4% GROSS RETURN.
Does that make sense?
Del
Ok so!
$180 x 52 = 9360
9360 into 120000 is 7.8%
Is this right and it is on the purchase price not the loan!
Thanks muchlyBronwen
If the good die young then I will live forever
Bronwen,
You’ve done it!!
Yes that is correct, it is calculated on the purchase price, not the loan.
You could do it on the loan, but if you are trying to follow Steve’s method, then it’s on the entire price.
Bye,
Del
Thanks for that Del,
In investment advertising they often say something like “10.5% return on your investment”,
Have they used the same method you outlined, or different?Keep smiling,
Sue [
]Be careful not step on the flowers when you’re looking at the stars
Hi Everyone,
Re “returns”, we are looking at a property for $44,000 which will return $140 week, from the calculations above this equates to 16.5% if I’ve done it correctly. However we need to spend a couple of weeks and a few thousand to get it to a rentable condition!
Do we add this to the purchase price?
Thanks, Everdine
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