Another twist to btl

Gorgeous_George

Ok, I may not be the typical BTLer.

Assuming my house value is £80K. After EA fees, solicitor fees and CGT, I could swap the house for £64K. With rent at £5,040 per year that is a yield of 7.9%. I didn't buy for capital gains - the numbers had to stack up on rent alone. I shall continue to look after my tenant but if she leaves, I shall find another one quite easily. The product is good.

GG

pickles110564

Cranston wrote: »

I think yields should be based on current market values and not the original purchase price

?
what a load of rubbish.

Microstar_2

pickles110564 wrote: »

?
what a load of rubbish.

So you think yield should be based on original purchase price ? :rotfl:

Generali

Yield = Current cash return (eg rent/dividend/coupon) divided by current market value

Return on equity employed = current cash return divided by price paid

Net Cashflow = costs of ownership minus income from that asset

Yield is a good way of comparing the rate of return from different investments.

Return on equity employed would be a good way of measuring the long term success of an entire portfolio across different assets.

Net Cashflow is one of many ways of measuring the success of a business.

I think these three terms and their uses are getting confused in the discussion.

Microstar_2

Generali wrote: »

I think these three terms and their uses are getting confused in the discussion.

Indeed. I'm not sure some posters grasped these concepts in the first place!