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  • Profile photo of IntrigueIntrigue
    Member
    @intrigue
    Join Date: 2010
    Post Count: 208

    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)?

    Profile photo of pinkboypinkboy
    Participant
    @pinkboy
    Join Date: 2010
    Post Count: 49

    [{(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

    Profile photo of IntrigueIntrigue
    Member
    @intrigue
    Join Date: 2010
    Post Count: 208

    Thanks pinkboy,  

    Seems I had the math just not the approprate formatting in my spreadsheet.. All fixed thanks again

    Profile photo of jacqui_03jacqui_03
    Member
    @jacqui_03
    Join Date: 2010
    Post Count: 142

    Pink boy do you include stamp duty when u calculate net yield?

    Thanks,

    Jacqui

    Profile photo of pinkboypinkboy
    Participant
    @pinkboy
    Join Date: 2010
    Post Count: 49

    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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