Property yeld

it'smeinit

Hi
I am trying to work out rental yield. Is this calculated on the price paid for a property or what it's now worth


Many thanks for any info

slopemaster

The way I see it, yield is calculated on current value, but return on investment is calculated on what you paid

princeofpounds

There are many different types of yield calculation, which all try to illustrate slightly different information. But the basic one is annual rental value divided by current property value.

it'smeinit

Thank you slopmaster
My yield is showing at 4.27% can Savvy property landlords out there give me their opinion on this return... I'm trying to decide if I should go ahead and let or sell and buy two smaller properties!

princeofpounds

It's not an especially meaningful figure to be honest. Especially for the sort of question you are asking.

Selling and buying two smaller properties will probably deliver a fairly similar yield unless you go for radically different market segments (like students or benefits tenants) or different geographical areas.

That would be a terrible yield for a simple small terrace house in Sunderland, but a great yield for a Chelsea mansion.

It's a number that only means something relative to the entire universe of possible investments with their associated risks and returns.

it'smeinit

Thanks priceofpounds

What would be an expectable yield for the average landlord?

jjlandlord

4.27% is rather low but it depends on the type of property and location.

I'm assuming that you own the property and that the yield is based on its current value and current rental market.

If you are pondering whether to keep it and let it vs. selling and buying 2 smaller properties, I would suggest that you do your homework and estimate what would be the yield with that other option, including costs for selling (would you be liable for CGT tax) and buying.

Once you have numbers for both options, and perhaps further options, then the decision should become much easier.

ViolaLass

princeofpounds wrote: »

It's not an especially meaningful figure to be honest. Especially for the sort of question you are asking.

Selling and buying two smaller properties will probably deliver a fairly similar yield unless you go for radically different market segments (like students or benefits tenants) or different geographical areas.

That would be a terrible yield for a simple small terrace house in Sunderland, but a great yield for a Chelsea mansion.

It's a number that only means something relative to the entire universe of possible investments with their associated risks and returns.

I always find it disappointing when a poster bothers to write something nuanced like the post I've quoted, elaborating on the easy answer of 'it depends' and in reply they get 'sure, but what's the average?'.

booksurr

it'smeinit wrote: »

Thanks priceofpounds

What would be an expectable yield for the average landlord?

define "average LL" and we may be able to answer the question

it may be somewhere between 0 - 12 % depending

ognum

ViolaLass wrote: »

I always find it disappointing when a poster bothers to write something nuanced like the post I've quoted, elaborating on the easy answer of 'it depends' and in reply they get 'sure, but what's the average?'.

I totally disagree, I think this reply is spot on with the information provided.

Where is your reply that has more/better information?

Mallotum_X

ognum wrote: »

I totally disagree, I think this reply is spot on with the information provided.

Where is your reply that has more/better information?

I think you have mis read that persons comment, it's to response to the quoted post they are discussing not the content of the post quoted.