Formulating Rental return

net return = Net rent/current market value, this is the only formula that you can use to compare 2 different properties as gross return is too variable (ie initial rent/purchase price, or current rent/cmv). The net return also allows you to compare other investments like shares, fixed interest etc as all costs have been factored into the return.

Mate.

I don't think there is any hard and fast rule to calculate what rent to charge…    properties in the CBD will provide a vastly different rental return when compared to properties in mining towns.  

If you intend to buy a property, either ask the agent for a rental valuation (if the sales agent gives you a verbal, knock off a few bucks as they tend to pitch at the high end of what is achievable) or get one of the property managers to prepare a written evaluation for you.

Otherwise, do a search on domain or realestate.com and look for comparable properties.

When your calculating your actual cash in pocket each week, remember to deduct your expenses (strata if unit / townhouse, agent management fees, land rates etc).  

Best idea is ti check out http://www.realestate.com.au and see what the rents are in the area you are buying in and that will give you an idea how much to charge. If you charge too much then it is more likely the place will be vacant alot, if too cheap then you may have to contribute etc…
Mel