27th August 2017
What are the elements in Investment properties?
There is a difference in calculating GROSS rental yield and NET rental yield.
The NET rental yield gives you a better reflection of your property appreciation factor, as in what your property price ranged at and this will allow other potential investors (they prefere NET rental return than gross if they are the real investor who looks for rental return for their investment portfolion) to decide if you choose to sell your investment property in the future.
I did not know that there is this thing call “STRATA LEVY” when I started on my first property investment in my early 20s, because I stay in a landed property, stand alone, there is NO strata levy payable quarterly.
To compute the NET (not gross) rental yield, we need to take into account these elements of expense (hopefully it is complete, do find out when you are thinking of investing in properties):
Normally, electricity, gas and water, telephone, internet are paid by the tenant, you can leave these out when you are renting out for your investment property.
Add all these up PER YEAR, then divide by 12.
This is the figure you will NEED to know to calculate NET RENTAL YIELD (the formula was provided in the previous blog).
Happy property investment hunting!
Licence Real Estate Agent (LREA)
Oracodes Realty Pty Ltd
Licence Real Estate Agent in NSW.