Property Yield Calculator

Understanding Upfront Cost and Yield

Upfront Cost Calculation:

The upfront cost of a property consists of the initial expenses required to acquire the property. It includes the following components:

• Property Price: The total cost of purchasing the property.
• Deposit: The amount paid as a down payment when buying the property.
• Other Costs: Additional expenses such as legal fees, property inspection costs, and any initial repairs or renovations.

Upfront Cost (%) = [(Deposit + Other Costs) / Property Price] x 100%

Upfront Cost (Value) = Deposit + Other Costs

Yield Calculation:

Yield, in the context of real estate, is a measure of the return on investment (ROI) that a property generates over a period of time. It provides an estimate of the profitability of owning and renting out a property.

Yield is typically expressed as a percentage and is calculated as follows:

• Annual Rental Income: The total rental income generated by the property in a year.
• Annual Mortgage Payment: The annual cost of repaying the mortgage, including interest.
• Annual Costs: Other annual expenses associated with the property, such as property taxes, insurance, and maintenance.

Yield (%) = [(Annual Rental Income - Annual Mortgage Payment - Annual Costs) / (Property Price + Annual Costs)] x 100%

Where:

- Annual Rental Income: The total rental income generated by the property in a year.

- Annual Mortgage Payment: The annual cost of repaying the mortgage, including interest.

- Annual Costs: Other annual expenses associated with the property, such as property taxes, insurance, and maintenance.

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