Can anybody enlighten me? Thanks.
Junior
Can anybody enlighten me? Thanks.
Newbie
rental $ * 12 months / condo priceOriginally Posted by irisng
Devil's Advocate
Newbie here.
Current market price or previous purchased price?
Example, bought 8 years ago at 600k fully paid and current rental at 3.9k? Need to deduct off property tax and maintenance fee (x12) ?
concubine Yu
shdnt yield be calculated upon yr own cost? shdnt only potential buyers will use the current market $ to ascertain their potential yield?
Junior
Gross yield = rental over a yield divide by current price.
Nett yield = rental over a yield minus all expense then divide by current price.
U take current price of condo because u can sell it and invest to get yield...
There is 1 more-
Nett yield from your outlay = rental per year minus expense minus interest then divide by your outlay...
Depends on what u are calculating.
Last edited by chestnut; 25-11-13 at 08:33.
Newbie
more interestingly, try:
take the total net amount earned from rental (minus monthly loan repayment, maintenance, property tax, agent's fee, income tax, everything) divide by your total initial cash contribution (20% + stamp + legal fees etc) towards the purchase
concubine Yu
u still nid to add in interest income forgo for yr savings tat u hv used to pay yr ppty.
stamp duty & legal fees shd be amortised over the useful life of how long the unit will be tenanted.
Valued Contributor
Easiest way is to take rental x 12 / purchase price (your purchase price).
If it works out to be > 6%, what are you waiting for
Senior
best best best way dont calculate just enjoy whatever u earn...go holiday buy nice car...thats the power of "OPiuM"...Other peoples Money
In the final analysis.....its NOT whether you have a diploma,degree,masters OR PHD....its whether you have a HDB/PC/EC or LANDED...
Junior
That's ROE.
Thanks everyone for the support! Find A Home Loan is Standard Chartered #1 broker in 2013.
Junior
Maybe need to deduct maintenance fees from the rental income, then x 12 / purchase price.Easiest way is to take rental x 12 / purchase price (your purchase price).
If it works out to be > 6%, what are you waiting for
Newbie
AgreedEasiest way is to take rental x 12 / purchase price (your purchase price).
If it works out to be > 6%, what are you waiting for
As Bro Chestnut shared, it depends on what you want to calculate.
This method gives me an indication whether it is a sound investment
Junior
Gross rental/ the amount of deposit u put to pay property
Junior
gross yield / price is the worse possible calculation that is touted by ppty agents. some times the net yield might become negative even with a decent gross yield.
There is no good or bad location. There is only good or bad price.
Junior
This is a more appropriate way except that it should be just minus off the monthly interest rather than monthly repayment.
Senior
dont waste time calculating rental yield based on historical purchase price.
"Never argue with an idiot, or he will drag you down to his level and beat you with experience."
Valued Contributor
So what price do you think we should based on?
concubine Yu
r u trying to tell me tat yr conservative 4-5% rental yield for JG is based on the current price when JG top?
Newbie
Also don't be too fixated by the magic no of 3,4 or 5% rental yield. You have to look at the gross amount you are getting also.
For eg, S$2.5k HDB rental is peanuts, though yield may be super gd.
Senior
Prospective Buyer will be looking at [(Monthly rental x 12) less annual expenses] divided by offer price of seller. Existing owner will be be looking at [Monthly rental x 12) less annual expenses) divided by purchase price. There is no right or wrong way as long as it makes you feel happier.
Senior
If you want to talk about historical purchase price, then someone will say 15%, 10% and others will say 3% all from the same development.
Is that even meaningful to discuss at all?
What do you think they used to calculate rental yield?
https://www.squarefoot.com.sg/market-watch/rental-yield
"Never argue with an idiot, or he will drag you down to his level and beat you with experience."
Senior
hhhhmmmmm
you have a point ...
I bought my house in 2006 at 1 mio and have been renting out at 10k a mth since then ...
wow 12 pct yield ?
but if I use latest valuation ... its a lot lesser ....
Junior
you have to use present day value becoz you have to assess between keeping the house and the yield thereafter, or sell at market price and use the money for alternative investment to give you same (or higher) returns.
There is no good or bad location. There is only good or bad price.
Senior
What if someone who bought the HDB 30 years ago at $35,000 and currently renting out at $2500 per month?
85% rental yield?
"Never argue with an idiot, or he will drag you down to his level and beat you with experience."
Valued Contributor
Yup. The owner is getting 85% rental yield.
What if someone who bought the HDB 30 years ago at $35,000 and currently renting out at $2500 per month?
85% rental yield?
Senior
perhaps he could rent it out for $500 per month and still think he is the smartest investor in singapore because of high rental yield
"Never argue with an idiot, or he will drag you down to his level and beat you with experience."
Newbie
the beauty of it is that he has this option & not scare even if rental mkt soften. this is the beauty of buying early...
even for ppl who bot at 96/97 peak; even if not much capital gain at current valuation for some old condos... their loan has been paid down by so much by today; they can afford to be very competitive in pricing their rental units
if you dont't own any property, you're short. take cover quickly
Senior
I think the thread is about calculating rental yield, not about how much one leverage or risk exposure.
"Never argue with an idiot, or he will drag you down to his level and beat you with experience."
Valued Contributor
Don't exactly see your point here.
If I work for 20 years and earn $15,000 a month now, should I take fresh grad salary and say I earn $2,500?
Senior
This is getting very complex and I certainly have no clue how you could related a person who have work for 20 years and a $15,000 salary to do with a fresh grad?
Why not compare to a infant sucking milk from his mother' breast?
"Never argue with an idiot, or he will drag you down to his level and beat you with experience."
Posting Permissions
Reply With Quote
