How do I calculate rental yield?

As a letting agent in Chelmsford and property investment adviser we are always advising clients on how to get the best returns from their rental property and we are often asked how do I calculate the rental yield. The rental yield basically means the percentage return you will receive on your investment from the buy to let property you are purchasing. The calculation for this is fairly simple once you know it. To calculate the rental yield on a property we first take the monthly rent and times is by 12 to give us the total yearly rent. We then divide the yearly rent by the price you are purchasing the property for to give us a figure and we then times that figure by 100 to give us the percentage rental yield. So lets say for example we were talking about a property purchase price of £195,000 which would rent out for £850 per month. The calculation in this case would be as follows:

£850 x 12 = £10,200 / £195,000 = 0.052 x 100 = 5.23%

In Chelmsford if you can achieve between 4.5-5% then that is a good yield in the current market. If you are considering buying an investment property no or in the future then why not have a chat with one of our property investment experts. Give us a call on 01245 835859 or pop into our office at 71 Duke Street, Chelmsford CM1 1JU for a coffee and a chat. We are more than happy to advise on properties even where you are buying it through another agent. We will advise you on how to maximise your return and how best to add value to properties.

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About Neil Baldock

Born and bred in Chelmsford, Neil went to Tyrells and The Boswells School and still lives in Springfield. A former police officer, Neil is an excellent problem solver for our clients. Neil oversees the Lettings, Property Management and Maintenance portfolio here at CDC and is able to offer specialist advice on all aspects of buy to let and property investment in Chelmsford and all areas of Essex. Neil is happy to offer advice to landlords even where the property is not being purchased through our agency and would welcome an informal chat with you regarding your investments. Neil is also well versed in HMO Management as we are one of the only agencies in Chelmsford which has a specialist HMO and rooms to rent department. Neil is Matthews younger brother and has a son named Michael.

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