Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

A qustion about yield ....

  • 27-07-2010 12:50pm
    #1
    Registered Users, Registered Users 2 Posts: 5,103 ✭✭✭


    So I'm looking at a house that rents for 1,500 a month.
    Am I correct in thinking it should be 1,500 * 12 * 14 = 252,000.
    So the house should be 'worth' 252K.

    Would that be an average yield?


Comments

  • Registered Users, Registered Users 2 Posts: 24,537 ✭✭✭✭Cookie_Monster


    average yield would be around 7% I think for a years rent, using this you get 257k. More or less the same.


  • Closed Accounts Posts: 749 ✭✭✭Bill2673


    I'd suspect you should look at a yield of somewhere between 5% and 8%, not sure how you handle tax within that.

    You have applied a yield of 7.2%, towards the high end. A 5% yield would price it at €360,000.

    Bear in mind that yield on cash is very low, at best around 3% for a long term savings account. So yield for other investments are priced off this and shouldn't be that much more than it. But on the other hand, the property market is in a mess and opportunities may be had. (time will tell whether or not they are good opportunities).

    I'm not in the property/ real estate industry. Its just an opinion.


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    An addition to this- rents are continuing to fall- and the proposals are for rent allowance (which has set a defacto floor on rents) to continue to fall.

    Personally I think you are assuming-

    1. Too high a potential rental income
    2. Yield that is probably unattainable
    3. You are not factoring other costs into the equation (such as 15% vacancy, upkeep on the property, tax, abolition of mortgage interest as a deduction for investors etc etc).

    The abolition of mortgage interest (in stages, to be complete by 2015)- alone, is top of my list for not buying rental property in the current market.

    S.


  • Registered Users, Registered Users 2 Posts: 2,458 ✭✭✭OMD


    mathie wrote: »
    So I'm looking at a house that rents for 1,500 a month.
    Am I correct in thinking it should be 1,500 * 12 * 14 = 252,000.
    So the house should be 'worth' 252K.

    Would that be an average yield?

    That would not be an average yield but a good yield and above historic norms in this country over the long term. Indeed over the long term very few countries average a 7% yield on property. A snapshot of some yields here http://www.globalpropertyguide.com/investment-rating shows the vast majority have yields below 7%.


  • Registered Users, Registered Users 2 Posts: 7,879 ✭✭✭D3PO


    OMD wrote: »
    That would not be an average yield but a good yield and above historic norms in this country over the long term. Indeed over the long term very few countries average a 7% yield on property. A snapshot of some yields here http://www.globalpropertyguide.com/investment-rating shows the vast majority have yields below 7%.

    so its off to Lima to buy :D


  • Advertisement
Advertisement