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How do I calculate Total Yield or ROI?

Discussion in 'General Property Chat' started by Double Korona, 7th Jan, 2016.

  1. Double Korona

    Double Korona New Member

    Joined:
    7th Jan, 2016
    Posts:
    2
    Location:
    Sydney
    Hi,

    I am fairly new in the property market. I would like to make sure I'm applying the following formula correctly:

    1) Total Return (Capital growth plus Rental Yield) = eg. 10% + 5% = 15%

    2) Total Costs (Interest Rate + Property Costs + Inflation) = eg. 5.5% + 1% + 2% = 8.5%

    3) Total Yield or ROI (Total Return less Total Costs) = 15% - 8.5% = 6.5%

    If this is correct, what ROI would be considered as average or high in Sydney? 5%, 6% or 7%

    Thank you.
     
  2. Gingin

    Gingin Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    93
    Location:
    Sydney
    Welcome to the forum. Keep reading.

    Every ones maths is different. But first learn what it is that you need from your calculations and how to apply them.