How do I calculate Total Yield or ROI?

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

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  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.
     
    Double Korona, 7th Jan, 2016
    #1
  2. Gingin

    Gingin Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    137
    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.
     
    Gingin, 9th Jan, 2016
    #2