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**From:**Donna Larcos

I think I asked this once before but it

languished. How to people measure

their rental returns over time?

I.e. you buy a $100k property and getting

$8k a year rent (8% gross return). You

have borrowed the whole $100k at 6.5%.

Two years later the rent is $9,000. Do you

relate your rent to the original input to the

property i.e. your return is now 9% or the

increase capital value of the property

which is now worth $115K in which case

your "return" has fallen to 7.8%

Six years ago I bought a unit for loan

value of $128k and the rent was $180.

which was a return of 7.3%. Now the rent

is $210, loan is the same and I have

equity of around $50k which would

otherwise mean rent return has "fallen" to

6%. I suppose I prefer to look at what I

actually put in after tax of my own money

and what capital growth and net rental

return do I have. $2800 per year after tax

(much less now) for six years has turned

into $50k. Return on that? I've misplaced

my Texas BA35 solar but I think it is

significantly more say 20-25% p.a. This

was my worst performing property. How

do others think of their return?

D

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