rental yields are irrelevant for property investors

Cool, @D.T. Been using the longer way all these while

 

Yield can def be useful rule of thumb, say if you know the suburb back to front, then a quick yield division calc can give you a rough price guide and you can see how the listing price compared- then take into account any specific features or value of that property over standard ones, better location, finish, views etc, but as rixter said - the net cf is what matters.
No point having a 8% cairns unit if body corp blows it out of the water and it end up being neg cf!

 

That's very true @Greyghost. Lots of people make that mistake when comparing house yield to units. BC can be a killer (but you also need to factor in the things you don't pay for, eg building insurance etc). I love numbers and always number crunch to see where it will put me financially if I purchase (both CF and equity).

 

Exactly travelbug, that's why I have an excel workbook open when searching property, factoring all amounts, from rates, insurance, bc, water, interest, repairs, agents fees, vacancy, gearing before tax (real out of pocket cost) then depreciation and then net cost after tax.

Sometimes investors factor depreciation above the line into their cash flow, but unless you have a Payg variation done you will still be out of pocket the tax benefit (all things equal) until you do your tax return.
So I work off cash first as you need to be able to hold the properties, then calc an after tax result - which is just an added benefit for me..