Okay so to determine Gross Yield I go – rent x 52 / purchase price.
What is the formula for Nett Yield (I know its less the expenses but cant seem to figure out how to get it into the formula)?
[{(rent x 52) – (all annual expenses) / purchase price] x 100.
Example:
[{($300 x 52) – ($4000)} / $300,000] x 100
[{$15600 – $4000} / $300,000] x 100
[$11600 / $300,000] x 100
= 3.87% net.
Happy to be corrected.
pinkboy
Thanks pinkboy,
Seems I had the math just not the approprate formatting in my spreadsheet.. All fixed thanks again
Pink boy do you include stamp duty when u calculate net yield?
Thanks,
Jacqui
Im no expert.
I would think that stamp duty being only a one-off payment and then taken off your gross CGT figure when you go to sell, it wouldnt be included in a net yield calculation. However, it could have a bearing if you were calculating to a controlled timeframe (say 5 yrs), which you could add into the 'annual expenses' divided by the timeframe (5 yrs). That would work for any expense I would imagine (conveyancing and the like).
Again, happy to be corrected. There is probably someone on here who would already have a comprehensive spreadsheet/calculator for net return.
pinkboy
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