Is there a rule of thumb calculation for rental return?

Discussion in 'Property Market Economics' started by Dan Donoghue, 30th Jul, 2015.

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  1. Veech

    Veech Well-Known Member

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    shouldnt depreciation to be looked at while calculating rental yeild. Yes its a bonus from tax man but its still money in your pocket when you still have taxable income.
     
    Veech, 31st Jul, 2015
    #21
  2. lightbulbmoment

    lightbulbmoment Well-Known Member

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    I was also told this rule but I have never seen it happen once you get over 600k.
     
    lightbulbmoment, 31st Jul, 2015
    #22
  3. Steven Ryan

    Steven Ryan Well-Known Member

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    By definition, if you are calculating your rental yield, you are calculating your rental yield. Depreciation isn't rental income :)

    I have a spreadsheet for calculating "holding costs" (or lack thereof) before/after tax and all income/expenses are factored in including stuff like depreciation, property manager costs, maintenance/levies/rates etc.
     
    Steven Ryan, 31st Jul, 2015
    #23
  4. Fargo

    Fargo Well-Known Member

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    The rule I use to instantly work out the minimum rent required to make a property viable and an instant money maker is $100p/w per $100k + $60. If it is less it is not sustainable and it may impede your ability to access capital growth. Capital growth is useless if you cant access it, or have to keep working to use it.
     
    Fargo, 31st Jul, 2015
    #24
  5. chindonly

    chindonly Well-Known Member

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    How about you just get a rental appraisal from a PM. Its free!
    However, I usually deduct 5-10% from what they say - tends to be a little inflated to help them get the job of managing.
     
    chindonly, 1st Aug, 2015
    #25
  6. Chilliblue

    Chilliblue Well-Known Member

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    Your own research though should always be undertaken as we have had several in the last few months give rental appraisals 10-15% below what we actually achieved.
     
    Chilliblue, 1st Aug, 2015
    #26
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