I have a landed house of SPA 800k, renovation 50k, loan size around 720k.

I am renting it out with rental covering the installment at approx (RM3.5k).

Assuming selling price is at 850k (SPA+reno) at the point of selling, roughly how long would I need to hold to achieve a profit of 20% (as the mortgage’s principal is reducing when tenant rental is covering the installment).

Calculation steps would be much appreciated.

Thanks.

This post has been edited by trainmaster: Nov 21 2019, 08:26 PM

Unrelated: please let me congratulate you on achieving such a high Roi for landed.

What is your installment amount and loan tenure (in years)?

Installment is approx 3.3k
Loan tenure: 35 years

Wow can get 3.5k rental?
For me personally.. Won't be selling anytime soon...

20% x 850,000 = 170,000 (Profit)

Assuming 3,300 instalment per month ...
2,000 interest 1,300 principal

170,000 ÷ 1,300 = approximate 131 months.

Any correction is welcome.

Sublet

How on earth are u able to find such gem!? Landed and high Rental!? I’m jealous!

May I ask why sell?

Vacation lodging is possible depending on location.

If he’s subletting rooms / Airbnb then it’s possible. If he’s really renting it at annual basis, then I would like to know which landed is this! Sell my current prop and buy it immediately

What rental do you expect for a landed property?

Thanks but the ratio of interest:principal is decreasing right? (Armotisation curve)

20% over 10 years consider high ROI?
1 year only 2% ROI only leh

roi rental should be 3.5k x 12 months ÷ 850k = 4.9% roi

Who can validate that calculation? You don’t need to calculate the interest you pay in the mortgage?

U have to consider how much you will be able to sell your property 10 years down the road also, in this case I assume conservative ie house maintains at its price. Tenant is covering the interest portion for you

This post has been edited by trainmaster: Nov 22 2019, 03:12 PM

that's gross ROI... which able to cover your interest incur totally and maybe some of your principal... so when you selling now... you can assume your interest are all covered by tenant... u just need to calculate gain based on your nett purchase price + cost incurred...

Why still ask here while it seems like you have own way to calculate it?

So pannai d why ask here leh?

Return on investment is a ratio between net profit and cost of investment.

define net profit