All Topics / Legal & Accounting / Calculating the Annual Rent Yield on IPs

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  • Profile photo of MonopolyMonopoly
    Member
    @monopoly
    Join Date: 2004
    Post Count: 1,612
    May 16, 2004 - 11:03 am

    Hi all,

    Got asked if I could post the formula (I use) to calculate Annual Rental Yield.

    I am sure there are much better, and quicker calculations than the formula I employ; so if you have one, please please post it here as I would love a simpler way of working it out.

    Example:

    Purchase price of IP = $200,000
    Weekly rent = 190 p/w
    or
    Yearly rent = $9,880

    Formula

    190 p/w X 52 = 9,880

    9,880 / 200,000
    (annual rent divided by Purchase price)

    = 0.0494 X 100 = 4.94% annual rental yield

    Cheers,

    Jo

    Profile photo of Still in SchoolStill in School
    Member
    @still-in-school
    Join Date: 2003
    Post Count: 1,844
    May 16, 2004 - 11:18 am

    Hi Monopoly,

    the caculation you have described above, is the only way i know in caculating annual yeild…

    as opposed to gross yeild and net yield of where you just add, or subtract, all your expenses from the annual rent.

    and then work it out, with the same caculation as above to get your gross or net yeild figures.

    Cheers,
    sis

    People 4get that by saving just $3 a day & investing it sensibly
    over a working life, you’ll end up with around $1 million

    Profile photo of CeliviaCelivia
    Participant
    @celivia
    Join Date: 2003
    Post Count: 886
    May 16, 2004 - 12:17 pm

    Yes this is the way I work out annual yield as well, not sure if there is another way.

Viewing 3 posts - 1 through 3 (of 3 total)

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