Jun 11 2010, 09:59 AM
QUOTE(vdfoo @ Jun 11 2010, 12:43 AM)
gross yield calculated as following:
(monthly rental x 12) / property price x 100
in other words:
(1200 x 12) / 195000 x 100 = 7.38%
property guru said can consider if the rate is double the FD rate. in this case which is true.
at the current market, i personally feel anything more than 6.5% is decent, of course the higher the better
another theoretically rule is, 10 months rental should be able to cover 12 months installment in any event that there is no tenant.
all the best
Since TS mentioned about the remaining leasehold tenure, just to highlight here so that people may comment on this also.(monthly rental x 12) / property price x 100
in other words:
(1200 x 12) / 195000 x 100 = 7.38%
property guru said can consider if the rate is double the FD rate. in this case which is true.
at the current market, i personally feel anything more than 6.5% is decent, of course the higher the better
another theoretically rule is, 10 months rental should be able to cover 12 months installment in any event that there is no tenant.
all the best
Usually some says the bank will not keen to lend for those with very little lease tenure left. If you are buying with 60+ years, should still be OK. but if you decide to keep for say 10-15 years and sell it again, MAYBE it will be harder for the next purchaser to get loan.
but of course, that also depends on what is your game plan. i.e. keep forever, keep for a while, keep for own stay etc...
Also, the yield may seem find, but you need to do your homework to make sure that this RM1200 is a realitic market rental rate and the occupancy rate here is good. Just to be very safe.
Good luck!
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