Yielding

Posted by sam i am (172 days ago)

This must be such a basic question, but what is the equation to calculate rental yielding %?

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Posted by walkup (172 days ago)

If you are anticipating purchasing a property and intend to rent it out, then suggest for a gross yield (no loan or maintenance costs input) take purchase price + disbursements + decoration to letting standard.
eg (a) sale price 4.8m, (b) legal + legal stuff/stamp duty/agent fee etc say HKD100,000) + (b) decorations (say HKD 100,000).
If the desired return (gross) is 7%, then (a+b+c)*.07/12 for the monthly rental
which in this case = 5m*.07/12 = HKD~30k.
(...after this you can deduct interest payments and insurance costs and management costings and lost capital interest payments etc and counter with anticipated capital appreciation...)