Important calculations to make before buying a rental property | Gross Yield | NET Yield | ROI
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- čas přidán 11. 04. 2020
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A lot of people make the mistake of buying rental properties with their emotions instead of buying based of numbers. As a result, they end up missing the important calculations they need to make prior to purchasing a property for rental purposes.
A Gross Rental Yield and a NET Rental Yield are important calculations to make BEFORE putting down an offer to purchase a property, for rental purposes.
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Great video. If i may provide some useful tips i found useful.
1. Buy below market value properties. If the average sale price is 1million zar (example), offer to purchase at R800 000 that way you make R200 000 equity. House will be valued at 1 mil but you bought for 800k. :)
Find motivated sellers for these deals to work.
Calculate your gross yield. Aim for 15% roi
Calculate your NET yield after all deductions. Bond repayment, insurance, rates and taxes, maintenance, management, vacancy rates etc.
Look for houses with multiple rooms. 3, 4 or 5 bedrooms. That way you will have multiple renters.
Lastly, find your strategy. Are you gonna Buy, refurb and refinance or are you looking for rental income or are you looking at house appreciation. All depends on your goals. Hope this helps.
I like ur teaching, they made me to go in to property management full time ❤️❤️easy understanding frm Botswana, Francistown
Thank you for the advice
Thank you Lindo for the education.
Wow, thank you
Very informative, thanks 💞
Thank you bro
Big ups Lindo!!!!!!!!!!
Informative and mind opening. 👌
very fascinating piece of advice
I like your videos. It is enriching my knowledge in properties. God bless you more and keep up the good work.big ups from Namibia, Henties Bay 🇳🇦
Very enlightening. Keep the good work my dear brother
Brilliant
Thanks for the video Lindokuhle I love your initiative of spreading insight about the industry.
Just a concern: If you increasing rent by adding features to charge a premium just so you can have the place tenanted, won’t that bite you in the couple of months approaching?
Based on the your scenario the average rent in that area would be R8000 and as a tenant I’ll always look for a cheaper place. The chances of finding someone to pay for those features are 0-20%. (You’ll be faced with the challenge of vacancy).
The property will still be in the negative because of the expenses.
Solution for this would be increasing of “units” or dividing the house into Multifamily units.
This ensures that you don’t get 100% vacancy enabling you to cover at-least some of the expenses and if 0% vacant, allows you to see some profit.
I’ve realized in a lot of cases that negotiating a purchase price down can be a reason of you losing the deal to someone else.
In conclusion the number of “units” will be your intermediate of profitability or non-profitability.
Thanks again for the context. Will definitely subscribe. 👍🏾
Wow. I love your analogy. Spot on.
Thanks for the information bro. Is possible to buy a house and build back rooms and put them on rental too?
Thank you for your amazing video, keep it up bro and never give up✊🏽
Love from Ethiopia🇪🇹✊🏽
Woow 😭😭 this is it. This is what I needed to hear Reham. Thank you so much. I will keep pushing. I will try.
@@LindokuhleMnisi don't just try you need to do it you know why because Africa need people like you.
@@reham7774 I am with you. Thank you. I will do it. More videos coming. Thank you so much.
God sent🤞
Awesome content, thank you for sharing
Thank you so much Annesley. I look forward to sharing more content. I've got a few more videos lined up with some really informative content. I'm excited. Stay tuned.
@@LindokuhleMnisi You are welcome my brother, i love your videos, you are certainly going places
@@LindokuhleMnisi I am loving your videos
Great Content Lindo, one easily falls into the mistake of assuming cash flow is always positive.
I'm have a rental property in the township which is 6 rooms. Planning to buy property for student accommodation, what should I consider when that time comes. Please advise.
I'm inspired Leadership
👋🏼 I’m really impressed by your content. Do you don’t mind offering mentorship to people who are knew in to property investment.
New
👏🏽👏🏽👏🏽👏🏽👏🏽👏🏽🙌🏽🙌🏽🙌🏽🙌🏽
Hi Lindo, I'd like the contacts of an affordable, reliable contractor or even the one you use. Can I send you an email?