Here is some figures on a property I have found
Interest only investment loan
5.81% fixed rate for five years
300K purchase
30 year term
$335.19 repayments per week ($17429.88 P/A)
$390 rental payment per week ($20280 P/A)
+ $2850.12
Overheads not factored in
Does this seem like a reasonable investment? How do you calculate the yield?
Hi DrSupachicken,
Your yield is calculated by dividing your annual rent by the purchase price and multiplying the result by 100, i.e:
Yield = (Annual Rent / Purchase Price) x 100
Yield = ($20,280 / $300,000) x 100
Yeild = 0.0676 x 100Yeild = 6.76%
Sounds like a good return to me considering the 5.81% interest rate.
Do you factor in overheads when yu calculate yields? Or is that something you factor into tax?
is 5.8% the cash rate given by RBA because if it is the bank doesn't lend money at this rate but adds a profit margin to it to come up with lending interest rate. Check with lender before borrowing and also what the fixed interest rate is.
drsupachicken its just an average deal. theres better out there, but then it does depend on the property as well if it will give you realy good cg down the track it mite be worth it
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