How are you all.
Just a quick one.I am a bit confused and the more I try to work it out the worse it gets. It is simple but it is doing my head in, so here you go, may you could clear out for me.
I was looking at properties in Colombia, Rent is paid every month.Example:
200 dollars per month rent . So 200(monthly rent) x12 (year)= $2400
BUTIf you workout weekly rent:
200/4(weeks in a month)= 50(per week)x52 weeks in a year=$2600
The problem is that in Colombia people don’t pay weekly, they pay montly, for example from the 07 of September to the 07 October.I just don’t get it, if I were to buy there and I get pay every month from 07 to 07 would I still be missing out from $200 per year?
It is a bit silly but , but the more I think about the more confuse I get.. Thank you , I hope some one could show me the light..lolapprox 4.3 weeks in a month so 200 per month does not equal 50 per week. Its closer to $46 per week
Tad confusing…..I know some investors here that acutally do themselves out of money by not being up on this. Occassionally in Aust, you will see a property advertised with a rental of say $1000 PCM – meaning per calander month. This is rregardless of how many weeks or extra days there are in a month. Whereas per week is per week regardless. This is the principal behind why paying off a homeloan per week can save money if set up correctly as well. For example, If your repayments were $10,000 per year, divide that by 12 and technically you have your real monthly repayments. Divide by 52 and you have what some lenders call your 'true' weekly repayment. Eitheer way it is the same. However……get your monthly payment and divide it by 4, and pay that amount per week, and you end up taking about 6 or 7 years of a standard 30 year loan term.
As far as the rental PCM goes, in your case to work out what you are REALLY getting per week, times the monthly amount by 12 and divide by 52…..voila. Clear as mud? Cheers
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he best way for you to work out the weekly amount is – monthly rent X 12months divided by 52weeks.There is not 4 weeks in a month,… four weeks is 28days, most months have 30days.
this is the same theory behind paying your loan of quicker by making fortnightly pay ments rather than monthly,
if your monthly payment is $1000, but you decide to pay of $500 perfortnight instead you will be much better off because there is only 12 months in the year but there is 26 fortnights in a year,
Hey guys thats awesome, Thank you very much.
So, monthly rent times 12 and then divided by 52 weeks will give me the average weekly rent.
Thank you so much you dont know how long I was thinking about this and the more I thought of it the more confused I got, Some times you need other people and they will show you the other point of view that you were missing.
It's quite simple Swifteagle.
To be absolutely correct, you must bring the rental back to per day.
If the rental quoted is weekly, divide by 7 (to give a daily figure) multiply by 365 (to give yearly, let's forget leap years) then divide by 12 to bring it the monthly equivalent. This evens out the bumps in the days of the months.
The reverse happens to convert montly to weekly. Take the monthly rent, multiply by 12 (to bring it to yearly), divide by 365 (to give daily rent) then multiply by 7.
Simple calculations, quickly done.
Margmarg4109 is the most correct here. Just one minor alteration, instead of 365 days per year, use 365.25. Account for that leap year. The banks don't miss this trick, neither should you.
Hey guys,I just wanted to thank you all once again for taking the time to help out.
It is interesting that something that I thought was silly it is not so silly after all, since people may not have good look at it and en up with a different figure depending what approach they take.
I wonder how many investors get tricked by overlooking this "silly" thing.
Another useful month/week thing to bear in mind is that there is, on average, 13 weeks in any 3 month period.
It's not something that comes up that often, but I find myself using it occasionally.
It's amazing how many people take the old "there's about 4 weeks in a month" trick and multiply it by 3 to get 12 weeks in 3 months, which is just not right.
swift eagle, did you end up purchaing property there? i am looking to also.Did you find finance their or have finance already? thanks
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