How To Work Out The Yield & ROI (Return On Investment)

This week we are running through the calculations you need to know in order to work out Gross Yield, Net Yield and ROI (return on investment).
#roi #propertyinvestment #calculation
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[@pedrotejero6828]

I am sorry if I am wrong, but the ROI should be the money left in the deal, 25.000 plus legals and fees. So the ROI is approximately 8.7%. In your example you are using the full purchasing cost. Again thanks for all the information shared with us

[@craigbedford3058]

correct- i thought the same

[@manni192]

Personally I think you should also account for taxes as part of the expenses before calculating net yield. HMRC love getting their rental income from landlords, whether it's 20/25% corporation tax + 8/32/35% dividend tax or 20/40/45% income tax. Makes a big difference to the money that goes into your bank account at the end of each year.

[@PropertyCouple]

Everyone’s tax situation varies as you have mentioned above so that would be a whole separate video - this one was to show how to work out yield and ROI. Thanks for watching

[@crinkle2649]

These videos are so incredibly helpful and you two make it easier to understand.

[@jasonleung2560]

Lia, got a question. You mentioned net yield at 8:55. Which is the annual net income x 12 divided by purchase price x 100. Do you add refurb costs into the total purchase price to work out the net yield?

[@radekkaszuba8348]

Fantastic content and very easy to understand. Well done to you ❤🎉

[@leodass]

Thank You Mdm Very very educational

[@sonia6106]

Thank you so much for the informative video, as usual all your content is so helpful. Could I please ask two questions? Is ROI the same as ROCE? In some videos I have seen them work out the ROCE in the same way. If not the same, what would be the calculation for this? Also if I was using my own money and a bridging loan, so no investors to pay back, in order to purchase a HMO with all bills included, would you say an ROI of 12% to 15% is good? Many thanks in advance.

[@lyngordon940]

Enjoyed watching & looking forward to the new stuff ahead!!

[@PropertyCouple]

Awesome, thank you!

[@wuzair]

You haven’t mentioned stamp duty as a cost ?

[@MARKB3946]

Great work and explanation as usual. Have an awesome and productive week.

[@PropertyCouple]

Thanks, you too!

[@rudrabarathan2737]

Brilliant ,video ver

[@dwjudd]

Do you have a spreadsheet

[@joannunemaker6332]

I liked this video. Very informative. 😊❤

[@PropertyCouple]

Glad you enjoyed it!

[@1024sofia]

u guys make such helpful videos!

[@PropertyCouple]

Happy to hear that!

[@JohnandCaraRetiredTravellers]

Whew Lia…a great deal of valuable information. I’m curious about the principle on the interest only loans and when are you paying the principle? Are these fixed rates? ~Cara

[@PropertyCouple]

They are interest only fixed rates :)

[@odysseasv7138]

If an investor was to invest for 2.6% net yield it wouldn't be so smart, there's surely other way more hands off opportunities for that low yield. So I agree with you of not being good deal. Especially if you do Int Only you HAVE to be looking at high yields. Yes capital gains over time will help but not always guaranteed not in all areas. Property is all about the perfect deal(1% or under available) that will give you minimum 8% net yield, IMO. I'd rather get a property with either 1. High yields but low prospects of appreciation 2. Average yields and average appreciation(location matters) But for sure I'd avoid anything yielding Low regardless of location etc.

[@odysseasv7138]

But of course depends the strategy. I like the BRRR, well essentially what you already do with your business, as is safer regardless of yields as long as there's positive cash-flow.

[@crinkle2649]

Has it really been 4 years? It doesn't seem like it was that long ago 😄

[@PropertyCouple]

Yep!

[@user-hl8iw8lv7s]

Do you have your own real estate communication group?

[@PropertyCouple]

What does that mean?

[@DowntownR]

It could be a problem if property prices don’t increase over the next 10 years or we have deflation. Both are distinct possibilities. In conclusion your last few videos tells me new purchases using “OPM” at 6% is no longer a good business.

[@PropertyCouple]

It’s still a good business if you can buy at the right price.