Making money with real estate – How to calculate the return? What do experts on YouTube say about real estate returns, taxes and investments? Here’s an overview of the most important formulas for real estate and investing. Step by step, from the basics to specific questions on the topic: calculation and return. Earn money with real estate! Here you will find tips from professionals. Good luck. Common questions include: How do you calculate yield? How do you calculate rental yield correctly? What is a high yield? What is an investment property? How do you calculate the return on real estate?
Calculate property value
Free for buying, investing, selling and renting! Read more here in our formulary for owners:
Here are a few initial key metrics and formulas for buyers:
The gross yield in percent is the counterpart of the multiplier.
This is how you calculate the gross yield:
Gross yield = annual cold rent x 100 / purchase price
Their apartment in Los Angeles generates annual rental income of the equivalent of 52,000 euros, and the purchase price was 1,000,000 euros. The gross yield is 5.2:
- Gross yield = 52,000 x 100 / 1,000,000 = 5.2
Compare: Rent multiplier (purchase price factor)
In real estate exposés you will almost always find information on the gross yield, sometimes also on the rent multiplier. The rent multiplier (purchase price factor) is a simple indicator to compare different properties at a quick glance.
How to calculate the rent multiplier:
Rent multiplier = purchase price / annual cold rent
An apartment in Los Angeles costs 1,000,000 euros and brings in annual rental income of 52,000 euros, has a rental multiplier of 19.2:
Rent multiplier = 100,000 euros / 5,500 euros = 19.2
Gross rental return
Here’s how to calculate the gross rental yield:
100 x annual net cold rent / property purchase price = gross rental yield in %.
Example calculation for gross rental yield:
- Step: 3.000.000 Euro purchase price + 350.000 Euro additional costs = 3.350.000 Euro
- Step: Net cold rent per year = 150,000
- Step: 150,000 euros / 3,350,000 euros x 100 = 4.47 % gross rental return
Calculate property value – rent, buy, live, here you will find all the important formulas for you as an owner. In our formula collection property you will find calculations and examples for buying, selling and renting. Rent or purchase price multiplier, gross yield, return on equity, property yield, reserves for maintenance and much more.
Below we have collected a few good videos from experts for you! Buying, investing and taxes, here are tips for your next investment:
What does yield mean? Simply explained (definitions)
What does yield mean? Simply explained (Real estate definitions)
Youtube description: “Here I explain to you very simply what the term yield means in the field of real estate / real estate / buy real estate. Maybe you have ever asked yourself the question “What is yield?” or “What does yield mean?” or “What is the definition / explanation of yield?” […]”
Rating: 362 positive / 19 negative
Do you want to invest on a larger scale?
If you want to invest in more than “just” a property, I recommend you check out Alex Fischer (in the video). He himself holds over 20,000 m² in sought-after locations in Düsseldorf and started writing down his knowledge a few years ago, making videos. Here are hundreds of tips for real estate investors, from building a property, buying as an investment to company structure, tax optimization and renting.
- Real estate investment on a large scale (external): Investing in real estate
Calculate real estate as an investment correctly – yield
Calculate real estate as an investment correctly – yield and more in 6 easy steps | Part 1 – by Immocation
- Rental income
- Instalment to the bank (expenses)
- Operating costs
- Cash flow
Video tips on buying and investing
Youtube description: “The calculation is a very important step in a real estate investment or real estate as an investment. In this video, we explain to you what is important when calculating the return on real estate as an investment. We cover things like taxes, real estate financing, equity, and cash flow. We also introduce Excel for real estate and an Excel real estate calculator. […]”
Calculate correctly before buying
Video rating: 1,900 positive / 65 negative
Calculate correctly before buying part 2
Video rating: 1,100 positive / 24 negative
Real estate yield – this is how you calculate correctly!
Real estate returns – here’s how to do the math right! – from immlab
Youtube description: “When it comes to investments, the return that the targeted investment should yield is of course of crucial importance. This is of course true for real estate investments as well. The question, however, is how to calculate that return, because it’s not simply that a deposit is made and a distribution flows back at the end of the term. The process is a bit more complex because there is usually a bank involved that charges interest and the IRS is also interested in a real estate investment. In this video, let’s take a look at what numbers go into calculating real estate returns and what the math looks like specifically.”
Rating: 140 positive / 10 negative
Rating: 118 positive / 4 negative
What factors influence the return?
All the costs you have affect the return on the property. These include the most important factors:
- Purchase price
- Incidental purchase costs (land transfer tax, brokerage fees, notary fees)
- Rental income
- Administrative costs
- Maintenance expenses
- Useful life (time until planned disposal)
- Increase in value
- Taxes (savings and charges)
- Financing costs
6.5% yield still possible with real estate?
6.5% yield still possible with real estate? – by Dr Florian Roski.
Youtube description: “I’ve been asked if returns of 6.5% are even possible with real estate these days. In this video I go over how interest rate and purchase price, interest rate and return, and expense and return relate.”
Rating: 155 positive / 8 negative
Buying or renting calculated through: 3 expensive thinking errors
Buy or rent calculated: 3 expensive thinking errors of Finanztip.
Youtube description: “Buy a home or rather live in rent? Is rent really just wasted money? Popular thinking errors like these can cost you thousands of dollars. How to do the math on this big decision, Saidi tells you.”
Rating: 4,200 positive / 148 negative
Rating: 1,100 positive / 29 negative
Save taxes with real estate
Save taxes with real estate by tax consultant Martin Müller.
Rating: 1,200 positive / 42 negative
Rating: 392 positive / 5 negative
Rating: 412 positive / 3 negative