How high can the return on investment be in real estate – I’m just on my way back from the famous Hollywood sign, where I’ve prepared another video for you about the fascinating investor story of Hollywoodland. It’s a perfect fit for the Hollywood Hills, where things are literally on a high. In today’s video, I’m answering an important question, “What’s the right rate of return in real estate?” Because when it comes to real estate as an investment, the rate of return simply can’t be high enough. Subscribe now: Lukinski YouTube!
First of all, I’ll clarify what yield means in the first place. Many people hear this term but don’t know exactly what’s behind it. Yield is a crucial factor in real estate investing, and I explain why it’s so important.
Video: How high can returns be?
Why can’t returns be high enough?
The question of why the return on real estate can’t be high enough is critical for any investor. In my video, I discuss the reasons why a high return is so desirable and how it can affect your investment.
The “higher the return”, the more you earn!
Let’s look at the calculation and why more income (annual net cold rent), above a threshold, always brings more profit:
Calculate net yield
The net operating income of a property is calculated by the following formula:
Net yield = (annual net cold rent – operating costs) / investment costs × 100%.
Let’s assume you buy a property for 200,000 euros and receive annual rental income of 12,000 euros, with operating costs of 2,000 euros. The net return would be calculated as follows:
In this example, the net return is 5%. This shows that you expect an annual return of 5% on your investment, based on the rental income minus the operating costs in relation to the investment costs.
To find out what yield really means and why it’s so crucial in real estate, check out my new video. I’ll answer all the important questions and give you valuable insights into the world of real estate investing, even for your first property!
Don’t forget to subscribe to my channel so you don’t miss any updates. Real estate investing can be complex, but I’m here to make it understandable and help you make smart decisions.
See you in the video where we explore the fascinating world of returns in real estate!
You want to know more?
10 golden investment rules
Start your real estate journey right! Time and time again, people dream of investing in real estate, but few turn that dream into reality. These 10 indispensable rules are key to turning your ideas into successful real estate ventures. No bullshit. 10 Clear Rules.
Discover with me the crucial factors, key figures and basics of real estate investment. Compared to other forms of investment, real estate offers a ‘safer’ way to invest capital with consistent returns and long-term appreciation. Want to invest your money wisely? My recommendation: Real estate, passive income and a good life.
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