3.3k done deal, but it's bare unit, owner doesn't even need to give lightings

I think this rental yield calculation is a bit obfuscating because it must means you have forked out extremely large sum of deposit and fairly lower loan amount from the bank considering RM 3.3K is the monthly rental, benchmarking against your monthly installment to the back for such highly priced property.

If I am not wrong, rental yield is calculated on either the market value or purchase price.
Let say the purchase price was RM1million, rental is RM3300 pm, then the rental yield is :-

(3300 x 12)/ RM1.0mil = 3.96% ---> Gross rental yield.
For Net rental yield calculation, u need to take in the monthly maintenance fee, quit rent, cukai tanah, fire insurance.

In general, for landed property, rental usually not enough to cover the loan instalment, especially if you are taking 90% loan. Rental can only reduce the pain but cannot cure the pain.

general rule of thumb is that rental yield is calculated based on current market value only.

those calculate on purchase price is syiok sendiri nia....bcos you forgone the opportunity gain element....like one "guru" used to promote his property.....

yes if calculate rental yield over historical purchase price is only for owner's own analysis and feel good factor.. overall rental yield must be calculated based on the current market value..

generally, prime landed assets have very low yield, due to the fact that they are very secure properties, hence low risk, hence low return. this is the same scenario for prime commercial shop lots, a lot of them are getting only 3 - 4% yield.

the upside for a low rental yield is that you can either "grow" your rental to achieve a target yield, or there's upside to capital gain / appreciation. therefore a lot of investors relate low yield asset with high capital gain, and vice versa.

another way to look at this is to use this so called yield play to identify below market value properties, for example, a condo in Mont Kiara is achieving a rental yield of 6.5%, but i know that specific area should only command a yield of 5%, therefore it's a good buy because there's potential for capital growth to reflect back the yield to 5%.

yield = rental / market value

always remember to deduct expenses to calculate net yield. no point looking at gross yields (except for quick comparisons).

There are 2 schools of thoughts.

Those who use purchase price to calculate the rental yield is to reflect the rental income against cost, for example, for the sub-sales property, purchase price is equivalent to market value, so no different if u use cost vs MV.

For those buying from a property developer, you can either use cost or mv, some developers sell their product using Built then sell methods, where the purchase price is also equivalent to market value. For the primary sales from the developer with 2-3 years construction period, u may use either MV or Cost, as your loan instalment was based on your purchasing cost not basing on the market value. So if I want to compare my yield against the instalment, I will use purchase cost on my rental yield calculation.

Prior Literature concluded that one can calculate rental yield based on MV, when
1) You're trying to sell the property, and demonstrating potential rental yields to prospective buyers, or
2) You want to refinance the property, in which case a calculation based on the current value will reflect your increased equity.

Most housing investors are aware that rental yield is not a key performance determinant for landed property, rental yield is secondary, but more on the capital appreciation. Especially those buying residential land, agricultural land with zero rental (thus zero rental yield), but the capital appreciation would be fantastic over time.

This post has been edited by cheahcw2003: Jun 24 2015, 03:12 PM

yes agree, a lot of normal housing investors just calculate rental yields against loan repayment..

collected my keys.. but did not really do defect check yet.

overall looks quite ok the quality...
flooring looks so-so only.. parquet like did not polish properly..

btw, heard from mgmt office ppl today around 8 units collecting keys..

This post has been edited by FROM_SG: Jun 24 2015, 04:06 PM

Hope everything is fine.
Submit the defect for my unit, and everything done within a week

Your situation is same with me I wanted to extend my living they said only glass canopies are allowed but my purpose is to blocked out the sun cause it very sunny at my living area. My plan is to build a concrete flat roof just like the original design to blend in to their design also not allowed. I just don't understand why the management always said the architect does not approved I just don't know for what reason. As you'll know grove, they can do a lot of renovation like extending the back to relocate their pool,everything also can. Anyway grove is under the same management.

This post has been edited by Cate: Jun 28 2015, 12:34 PM

This part is incorrect. If yield is low, it will want to go back to a normal situation which is higher.
To achieve this two things can happen:
1 Rental goes up
2 Market value goes down

So when the yield is low there is an expectation that the price can go down.

groove is not stratified title.....

looks like the mentality of owners need to change when buy into stratified landed.....

Dear all property customers/owners,

I'm Isaac from DF Realty, we specialize in Dale, Reed and Grove. Feel free to contact myself shall you looking at rental, sale or purchase as we will be able to provide further information and assistance.

We promise to give the best that we could to assist.

Please do not hesitate to call Isaac 012 222 8262

Apologies if there is any inconvenience caused.

Have a nice day.

Regards,
Isaac Lim
DF Realty
012 222 8262

As far as I know grove is fully gated and guarded hence it is under strata title.
As we understand that buying a strata title house indeed has a lots of restriction but to a certain extent.

This post has been edited by Cate: Jun 28 2015, 05:46 PM

what is the rental rate for the reed right now? Confirmed transaction please...

Bare unit 3300 someone just mentioned it

Technically , rental yield has to be based upon current market value, period. There is no 2 ways about this.

If a one calculating against cost or benchmark it against loan repayment , that is more for cash flow management.

I know what you mean but there is a discrete definition of yield . So let not confuse about that otherwise it will confuse everyone

I am not sure if Groove is under strata title......

can anyone here confirm?

Yes Grove is under strata title

ok, thanks Cheah!