- wannabe2Member@wannabe2Join Date: 2003Post Count: 65
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]p0sitiveCasHfl0wMember@p0sitivecashfl0wJoin Date: 2003Post Count: 133
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.
Is your money LAZY[?]wannabe2Member@wannabe2Join Date: 2003Post Count: 65
really appreciate your help,just had a brain explosion!!![blush2]p0sitiveCasHfl0wMember@p0sitivecashfl0wJoin Date: 2003Post Count: 133
No problem at all [biggrin]
Is your money LAZY[?]MiniMogulParticipant@minimogulJoin Date: 2002Post Count: 1,414
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
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