Alexmartin
Registered User
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- 61
Ive been reading some other forums today and have seen a different calculation for yield come up a couple of times.
One person said that they paid out €20,000 between deposit and all other expenses when they bought an investment property.
All expenses, like repairs, property taxes, income taxes, mortgage, repairs, EA etc are paid from the rent of €1000PM or €12000 per year.
Whats left in their pocket, so to speak after all of that is €3000.
So on an investment of 20,000 he makes €3000 per year, even after all taxes are paid.
His "yield" on his investment is (3000/20000) * 100 = 15%
What does everybody think of this?
He put in 20k which makes him 3k per year after tax.
And that doesnt even take account of the scenario that when the mortgage is paid the property is all his.
Phenomenal.
I think he calculated yield in the normal way at about 9%, but his "return on investment" is a better way to look at it i think.
I've read about this in a lot of places over the last few months, but really gace it some thought today.
One person said that they paid out €20,000 between deposit and all other expenses when they bought an investment property.
All expenses, like repairs, property taxes, income taxes, mortgage, repairs, EA etc are paid from the rent of €1000PM or €12000 per year.
Whats left in their pocket, so to speak after all of that is €3000.
So on an investment of 20,000 he makes €3000 per year, even after all taxes are paid.
His "yield" on his investment is (3000/20000) * 100 = 15%
What does everybody think of this?
He put in 20k which makes him 3k per year after tax.
And that doesnt even take account of the scenario that when the mortgage is paid the property is all his.
Phenomenal.
I think he calculated yield in the normal way at about 9%, but his "return on investment" is a better way to look at it i think.
I've read about this in a lot of places over the last few months, but really gace it some thought today.