Rental Yields

H

Howitzer

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To any investors out there. What was the rental yield of your property when you bought and when did you purchase?

Would you consider investing at current yields or does that even come into the equation for you?
 
Bought 2 bed duplex in Beaumont in Nov 99. Yield then was 7.15%.

Rental being received now for is more or less same as 2000/01 but property value has doubled.

Wouldn't dream of buying now to invest to be honest.
 
Is rental yield calculated by yearly rent divided by initial purchase price? Do you have to take account of tax paid on the rental income and other typical yearly costs on the property?
 
To me the Rental Yield = yearly rent after tax / total cost incl stamp duty

In other words how much do i get into my hand after investing a certain amount of money

I'm sure there are many different definitions.
 
asdfg said:
To me the Rental Yield = yearly rent after tax / total cost incl stamp duty

In other words how much do i get into my hand after investing a certain amount of money

I'm sure there are many different definitions.
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i think your better using gross yield as investors can write off proits against losses on other properties.yields on investements are usually only quoted gross -excluding tax. although the costs of owning a property such as maintenace insurance etc should be taken into account, so if they amount to 1% of market value of house then it would reguce the gross yield by 1%.
judging by the few responses to this topic i dont think many people are worried about rental yields !
 
bearishbull said:
judging by the few responses to this topic i dont think many people are worried about rental yields !
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Yeah, I was hoping to see what the trend was. But you know dem property investors, always keeping their cards close to their chest!
 
I use a cash yield figure so it is directly comparable to what i would get in a deposit account.

That is, the net rent divided by the actual cash i had to put into the deal.

I don't invest unless this figure is minimum 10%, don't care how nice the property is.

And just to add, i wouldn't touch property in dublin as an investment at the moment.
 
Two properties

a) purchased in Jan 2004 getting a 4.75% yield, and that is with below market rent (annuity mortgage)
b) purchased Sept 2005, getting a 4.33% yield, and again this is slightly below market rent (interest only mortgage)

My simple basis is yearly rent / purchase price (excluding stamp duty and taxes)
 
askalot said:
Because it would result in negative yield?
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No it wouldn't , a lower yield yes - how can two positive numbers divided into one another and multiplied by 100 give a negative answer:confused:
 
demoivre said:
No it wouldn't , a lower yield yes - how can two positive numbers divided into one another and multiplied by 100 give a negative answer:confused:
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If you count interest as a cost. If the rental return is less than interest paid to the bank then your profit is a negative number.

You'd have to get the accountants out on that one though.

Traditionally this would never have occured but it's more transparent now with interest only mortgages which may or may not cover rental returns.
 
demoivre said:
No it wouldn't , a lower yield yes - how can two positive numbers divided into one another and multiplied by 100 give a negative answer:confused:
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If your outgoings (tax, maintenance and mortgage) are less than your rental income, then you have a negative yield.
 
Because it would result in negative yield?
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How

Assumption

Yearly Rent 12,000
Profit 1,000
Property Cost excl SD 200,000
Stamp Duty 8,000

Using your calc:
Ex SD & Taxes 12,000 / 200,000 = 6%

Incl SD & Taxes 12,000/ 209,000 = 5.7%

Both positive

Post crossed with prev 3 or 4
 
Are you talking about yields in terms of the capital value versus the rental income? See thread here

http://www.askaboutmoney.com/showthread.php?t=20354&highlight=yields

Do not get yields confused with what is essentially the profit you wish to make once you're paid the rent and deduct your costs (mortgage, insurance, running costs, etc). negative 'yoield' would obviously occur where you end up in a defecit after paying these.
 
I calculate initial rental yield as rental income as a % of cost price including outlay. I bought a commercial premises in Jan with a yield of %6.2 ie rent rollover as a percentage of what I paid for the building including sd and legals. AFAIK industry pros. calculate net yield in the same way or gross yield where sd and legals are excluded from the workings.

The calculation of profitiability is far more complex as you would also have to consider the appreciation rate of the property.
 
Def of Yield- In general, yield is the annual rate of return for any investment and is expressed as a percentage. Yield may not be a true return measure because it doesn't account for capital gains or losses.

E.G The cost of my investment property was the deposit I had to stump up. The actual price of the property doesn't come into it.

So for an initial outlay of 40k I clear 500pm profit. That gives me a yeild of 15%.
 
The Punter said:
Def of Yield- In general, yield is the annual rate of return for any investment and is expressed as a percentage. Yield may not be a true return measure because it doesn't account for capital gains or losses.

E.G The cost of my investment property was the deposit I had to stump up. The actual price of the property doesn't come into it.

So for an initial outlay of 40k I clear 500pm profit. That gives me a yeild of 15%.
Click to expand...

And how long have you been a property investor?
 
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