Welcome Guest ( Log In | Register )

Outline · [ Standard ] · Linear+

> Property holding period calculations

views
     
apalexar
post Nov 23 2019, 11:56 PM

apalexar
******
Senior Member
1,300 posts

Joined: Sep 2012


4~5 years, assuming you're able to sell it at min 850k price that time.
I'm assuming your loan interest is 4.2% and 35 years loan tenure.

This post has been edited by apalexar: Nov 23 2019, 11:58 PM
TStrainmaster
post Nov 24 2019, 11:32 PM

Getting Started
**
Junior Member
102 posts

Joined: May 2007
QUOTE(apalexar @ Nov 23 2019, 11:56 PM)
4~5 years, assuming you're able to sell it at min 850k price  that time.
I'm assuming your loan interest is 4.2% and 35 years loan tenure.
*
May I see how you calculate?
apalexar
post Nov 25 2019, 07:29 AM

apalexar
******
Senior Member
1,300 posts

Joined: Sep 2012


QUOTE(trainmaster @ Nov 24 2019, 11:32 PM)
May I see how you calculate?
*
Sorry my bad, miscalculation as I use 850k in my calculation but actually should be 720k since 130k is your own money.
Now it should be on 12th or 13th year in order to generate profit of 20%.
My calculation is simple, your loan is 720k and assuming that you are getting rental income every months which is able to cover up the monthly installment, on year 12th your loan balance is RM578,964.48 (calculation using loan calculator) and if you're able to sell it on price min 850k, it will be like 850k - 130k (self money) - loan balance
TStrainmaster
post Nov 25 2019, 09:35 AM

Getting Started
**
Junior Member
102 posts

Joined: May 2007
QUOTE(apalexar @ Nov 25 2019, 07:29 AM)
Sorry my bad, miscalculation as I use 850k in my calculation but actually should be 720k since 130k is your own money.
Now it should be on 12th or 13th year in order to generate profit of 20%.
My calculation is simple, your loan is 720k and assuming that you are getting rental income every months which is able to cover up the monthly installment, on year 12th your loan balance is RM578,964.48 (calculation using loan calculator) and if you're able to sell it on price min 850k, it will be like 850k - 130k (self money) - loan balance
*
Very good, you have by far the best answer (most accurate) in this thread.

See, buying property will only give you 20%/13=1.53% of return per annum (Conservative approach, rental covers installment case. Price hardly appreciates in ~10 years time which is quite realistic in today’s expensive property market). Awake!!

This post has been edited by trainmaster: Nov 25 2019, 09:45 AM
David_77
post Nov 25 2019, 10:18 AM

In a hurry to make up for lost time!
*******
Senior Member
2,396 posts

Joined: Aug 2016


QUOTE(trainmaster @ Nov 25 2019, 09:35 AM)
Very good, you have by far the best answer (most accurate) in this thread.

See, buying property will only give you 20%/13=1.53% of return per annum (Conservative approach, rental covers installment case. Price hardly appreciates in ~10 years time which is quite realistic in today’s expensive property market). Awake!!
*
Lol! TS started this as bait to finally gives his real intention 🤦🏻‍♂️
mini orchard
post Nov 25 2019, 11:43 AM

10k Club
********
All Stars
13,913 posts

Joined: Sep 2017
We should not be over concern about others with regards to property investments.

If those want to sleep, so be it. Else how to make money ?

Most good men died during the last great flood except 1.

This post has been edited by mini orchard: Nov 25 2019, 12:44 PM
apalexar
post Nov 25 2019, 07:03 PM

apalexar
******
Senior Member
1,300 posts

Joined: Sep 2012


QUOTE(trainmaster @ Nov 25 2019, 09:35 AM)
Very good, you have by far the best answer (most accurate) in this thread.

See, buying property will only give you 20%/13=1.53% of return per annum (Conservative approach, rental covers installment case. Price hardly appreciates in ~10 years time which is quite realistic in today’s expensive property market). Awake!!
*
That's only the case if you are just able to sell it for 850k price, if able to sell at 1.++M at year 13th or earlier then it's another story, so.. still based on your investment unit ong or not
cherroy
post Nov 26 2019, 10:26 AM

20k VIP Club
Group Icon
Staff
25,759 posts

Joined: Jan 2003
From: Penang


QUOTE(trainmaster @ Nov 21 2019, 08:24 PM)
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.
*
Why make calculation complicated.
You buy 850K (after adding in renovation 50K) and sell also 850K, there is no capital appreciation at all.
So you return only rely on your rental 3.5K

3.5K/850k = 4.1%.
And your mortgages interest rate is likely to be 4.xx%.

So most rental money made is going to pay the interest.
And the 3.5K is not yet deduct expenses related, like maintenance fee, misc assessment, quit rent etc.

You don't need complex mathematics to know it won't be good return.

mini orchard
post Nov 26 2019, 11:40 AM

10k Club
********
All Stars
13,913 posts

Joined: Sep 2017
QUOTE(cherroy @ Nov 26 2019, 10:26 AM)
Why make calculation complicated.
You buy 850K (after adding in renovation 50K) and sell also 850K, there is no capital appreciation at all.
So you return only rely on your rental 3.5K

3.5K/850k = 4.1%.
And your mortgages interest rate is likely to be 4.xx%.

So most rental money made is going to pay the interest.
And the 3.5K is not yet deduct expenses related, like maintenance fee, misc assessment, quit rent etc.

You don't need complex mathematics to know it won't be good return.
*
Another property guru in kambing.
cherroy
post Nov 26 2019, 12:23 PM

20k VIP Club
Group Icon
Staff
25,759 posts

Joined: Jan 2003
From: Penang


Sorry for mistake in calculation
3.5K x 12 / 850K = 4.9% yield

Rental yield indeed superb for current market, as a lot of residential yield below 2 to 3% only.
But loan interest also 4.xx%.

Property is about capital appreciation, and where the big money is.


TStrainmaster
post Nov 26 2019, 11:48 PM

Getting Started
**
Junior Member
102 posts

Joined: May 2007
QUOTE(cherroy @ Nov 26 2019, 12:23 PM)
Sorry for mistake in calculation
3.5K x 12 / 850K = 4.9% yield

Rental yield indeed superb for current market, as a lot of residential yield below 2 to 3% only.
But loan interest also 4.xx%.

Property is about capital appreciation, and where the big money is.
*
U can’t treat 3.5k/850k as rental yield, as you are paying interest on top of the principal (850k).

Anyways the idea I asked is not about rental yield but more on demonstrating it is a tenant market nowadays as there are not much incentives in owning a property, unless you really love the place
mini orchard
post Nov 27 2019, 07:48 AM

10k Club
********
All Stars
13,913 posts

Joined: Sep 2017
For the past years, msia property market is all about buyers and tenants market.

But ONLY property gurus said otherwise.

 

Change to:
| Lo-Fi Version
0.0130sec    0.28    5 queries    GZIP Disabled
Time is now: 29th March 2024 - 06:41 AM