All Topics / The Treasure Chest / Returns How to work it out?

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  • Profile photo of EcclesEccles
    Member
    @eccles
    Join Date: 2003
    Post Count: 69

    I am a newbie very new!!! [:I]
    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[:D]
    I know I should know this but hey what can I say?[:I]

    If the good die young then I will live forever

    Profile photo of wilandelwilandel
    Member
    @wilandel
    Join Date: 2003
    Post Count: 761

    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

    Profile photo of EcclesEccles
    Member
    @eccles
    Join Date: 2003
    Post Count: 69

    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 muchly

    Bronwen

    If the good die young then I will live forever

    Profile photo of wilandelwilandel
    Member
    @wilandel
    Join Date: 2003
    Post Count: 761

    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

    Profile photo of diclemdiclem
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    @diclem
    Join Date: 2003
    Post Count: 537

    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

    Profile photo of everdineeverdine
    Member
    @everdine
    Join Date: 2003
    Post Count: 119

    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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