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.