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Approximate % difference between gross and net yield.

Discussion in 'Property Finance' started by K_Point, 10th Jul, 2015.

  1. K_Point

    K_Point Member

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    I've read somewhere that it is about 5%. Can anyone confirm if this is correct.
     
  2. pinkboy

    pinkboy Well-Known Member Premium Member

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    House, unit, commercial?
    CBD, capital city, regional?
    Old, new, projected?

    How long is a piece of string?

    pinkboy
     
  3. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    I'd say it's a lot higher than that.
    Many would be over 100% difference.
     
  4. spludgey

    spludgey Well-Known Member

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    Just post all numbers and we'll tell you what your net cashflow is.
    Net yield is a bit of a pointless figure as it depends on so many things. For example, want a good net yield? Buy a property with cash and don't get a mortgage on it.
    Not really an indicator of anything then, is it?
     
  5. albanga

    albanga Well-Known Member

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    As a quick rule of thumb deduct 20% from the annual rent.
    So let's say property value is 400k and rent is $400 a week ($20,800 annually). Gross yield is 5.2%.

    Now deduct 20% from the annual rent for costs which is $16,440. Net yield is 4.1%.
     
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  6. EN710

    EN710 Well-Known Member

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    Um, I'd say net yield is after all costs
    So my 7% property net yield is about 0-1% (after interests, management fees, council etc)
     
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  7. D.T.

    D.T. Adelaide Property Manager Business Member

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    It varies a lot.

    Insurance, council rates, PM fees all vary by state. Whether or not strata fees should be included depends on the property.

    Net isn't really something I monitor. I couldn't tell you the net figure on my IPs. It just isn't important to me.
     
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  8. K_Point

    K_Point Member

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    Thanks folks. House is what I was looking for and thought there might be a rough figure to deduct after calculating gross yield. Sounds like the 5%figure I read is not right but perhaps they were talking about commercial.