How to work out percentage yield/profit?

[newlandlord1]

Hi everyone. I am looking into property investment at the minute and just after a quick answer to a little question if possible.
Could anyone tell me how to work out the percentage yield if i was to rent out a property and also the yield profit if i was to buy a property to renovate and sell??

Thanks for your help.
K:confused:

[MrShed]

Try this thread:

http://www.landlordzone.co.uk/forums/showthread.php?t=2413&highlight=yield

And I'm not going to go on about it, but please search before posting - there are dozens of threads on yield, it took me all of 30 seconds to find the most informative.

[newlandlord1]

Thanks for the thread and stating to look before asking!!
I did look on the internet and could not find anywhere that gave a calculation for working out yield on the profit from renovating and selling.....

Any help on this would be appreciated.

[MrShed]

No neither have I - doubt it is called yield in that situation, think thats why. It a simple profit/loss calculation in that situation. Yield is like a long term yearly thing, the key to BTS(buy to sell) property is a fast(preferably < 3 months) turnover.

[newlandlord1]

Thanks again. Having thought about that, do you think this sounds right?
Clear Profit / Total costs x 100.

[newlandlord1]

Yeah thank you, that would be more accurate too.
I have worked out on my investment, it would be appoximately 9.8%. Do you think this is a good percentage profit??? (£17,850 from £182,150 spent).

£1 million profit........If only!! :rolleyes:

[MrShed]

Over what time period?

[Poppy]

Before answering that, it would be helpful to know how long you think it would take you to make that amount of money. One month, six months, a year? What do you anticipate?

[newlandlord1]

Hoping on 3-4 months. 5 at a maximum.

[MrShed]

I would say over that time period it is a good return, although not outstanding.

Think about it in terms of what the money could have earned had it been doing something else. So basically, at the bank the absolute best you are going to get is maybe 10%(although probably not for that size of investment). Anything better than this is good. In economic terms it is called Opportunity Cost.

[welshgold]

If I had 186k for 6 months I could make a fair bit more than that amount!!!

wickerman it seems that you have the answer to making money, if you can increase your capital by 10% every 6 months even starting with £100,000 - you would be a millionaire in 12 years