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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
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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