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How To Calculate Yield On Btl

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CAN SOMEONE PLEASE TELL ME A FORMULA TO CALCULATE YIELD ON A BTL OR ANYTHING THAT IS BEING RENTED?

No i dont have a BTL but i know someone who does and was wanting to see what they receive as a percentage

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CAN SOMEONE PLEASE TELL ME A FORMULA TO CALCULATE YIELD ON A BTL OR ANYTHING THAT IS BEING RENTED?

No i dont have a BTL but i know someone who does and was wanting to see what they receive as a percentage

Easy. It's approximately zero.

Seriously:

Percentage yield = 100*(Income - Expenses)/(Capital outlay).

Income = e.g. rent

Expenses = e.g. mortgage payments

Also, have to take tax into account.

Edited by karhu

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Yield is:

100 / Market price of house * annual rental income

eg, a house with a market price of £200,000 that rents out for £12,000 a year would be yielding 6% gross. For Net yield you have to take away any maintenance costs & taxes on income.

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CAN SOMEONE PLEASE TELL ME A FORMULA TO CALCULATE YIELD ON A BTL OR ANYTHING THAT IS BEING RENTED?

No i dont have a BTL but i know someone who does and was wanting to see what they receive as a percentage

Delboy, what is the rent and the purchase price of your friend's BTL?

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Easy. It's approximately zero.

Seriously:

Percentage yield = 100*(Income - Expenses)/(Capital outlay).

Income = e.g. rent

Expenses = e.g. mortgage payments

Also, have to take tax into account.

Expenses - not forgetting new washing machines, new fridge freezer, new cooker, emergency plumbers, insurance, compensation to tenant when he cant use his bathroom for 3 weeks etc etc...

I love my landlord.

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Mortgage repayments do not come into the yield calculation. The mortgage is just a way of funding your investment.

Gross yield = (annual rental income) / (house price)

You should allow for voids (periods when the property is empty and earning no rent), so best to assume 11 * monthly rent as the annual rental income.

Net yield = [(annual rental income) - (expenses)] / (house price)

Expenses used for net yield include:

- agent costs

- insurance

- gas safety check

- ground rent

- repairs

- depreciation

- damages

- accountancy

- the value of your own time

The net yield figure is then directly comparable to dividend yields on the stock market.

HTH

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Mortgage repayments do not come into the yield calculation. The mortgage is just a way of funding your investment.

Gross yield = (annual rental income) / (house price)

You should allow for voids (periods when the property is empty and earning no rent), so best to assume 11 * monthly rent as the annual rental income.

Net yield = [(annual rental income) - (expenses)] / (house price)

Expenses used for net yield include:

- agent costs

- insurance

- gas safety check

- ground rent

- repairs

- depreciation

- damages

- accountancy

- the value of your own time

The net yield figure is then directly comparable to dividend yields on the stock market.

HTH

using your math my landlord makes 5.7% gross

ril

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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