2007-02-06 07:52:35 · 3 answers · asked by bumberclarte 1 in Business & Finance ➔ Renting & Real Estate
take what you got on the rent, deduct the payments, taxes, repairs and insurance, and any other money you put into the house and what's left is your yeild.
2007-02-06 07:57:01 · answer #1 · answered by wish I were 6 · 0⤊ 0⤋
The equity yield would be calculated by:
Net Operating Income divided by initial investment.
NOI is calculated by Gross Income- all expenses associated with the property (taxes, insurance, maintenance etc not mortgage payment).
Initial Investment- Costs of loan + $$$ amount invested.
Example: Purchased a 6 family unit for 600k and put down 110k plus 10k in closing costs etc. for an intial investment of 120k .
My net operating income is 18k or 1,500 per month. 18k/120k =15%. As time goes on your yield will increase due to rent increases. Also, do not forget about the appreciation in the property as well.
2007-02-06 08:04:51 · answer #2 · answered by tianaramal 4 · 1⤊ 0⤋
Net annual income divided by purchase price x 100 = yield%
2007-02-07 00:47:56 · answer #3 · answered by BRIAN S 3 · 0⤊ 0⤋