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February 06, 2017

hot to calculate gross rent return on investment

If you are investing in real estate then you generally need to calculate your expected gross rent return on investment.  This is the basic method;

Annual rent received, divided by the purchase price = The final figure will be your gross rent return. Multiply this by 100 if you wish to express this as a percentage. 

For example, $18 200 annual rent received ($350 per week) on a $300 000 property purchase shows a 6 per cent gross rent return. The sum is worked out as follows:

$350 (per week) x 52 = $18 200 divided by $300,000 (purchase price) = 0.0606 and multiply this by 100 = 6.06%. That is at the end of the year you will have received a 6.06 per cent gross return on your $300,000 purchase price. If you do this for each of your alternative property choices, you will quickly see which one offers the highest return.

Natalie and Jodi the sales team @ Real Estate Yeppoon would love to help you find a suitable investment property and Troy the Property Manage @ Real Estate Yeppoon will be able to ensure you maximize your return on investment. Call the office on 07 4819 9676 to discuss your requirements.