All Topics / General Property / calculating returns on a mobile phone!!!

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• guys out there can you help? i’ve forgotten how to calculate the worth of a deal re : the rental returns v the purchase price .its been that long since i’ve bought a place and now i’m a long way from home without my bibles!!![blush2]

If you are asking for the 11 second solution then it is simply:

Rent per week Divided by 2 Multiplied by 1000

eg rent pw of \$150 / 2 x 1000 = \$75000

If the answer is more than the asking price then the deal will most probably be not +ve geared.

If you are just trying to work out the rental yield then it is:

Rent per week Multiplied by 52 Divided by Purchase Price Multiplied by 100

eg \$150 x 52 / \$75000 x 100 = 10.4%

Hope this helps.

Cheers,

J.

No problem at all [biggrin]

Cheers,

J.

I calculate the gross yield like this:

rent per week….times 52 equals….

divided by the purchase price.

i.e. for a 52k house where the rent is 100 per week

100 x 52 = 5200
divided by the purchase price = .1

.1 means ten percent yield
.05 means 5 percent yield

etc

i.e. I skip the ‘x 100’ bit and do that in my head cause I know what the decimals mean

joy to the world

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