When we plan our property investment, how you choose which property is better to invest ? How you analysis which property is more higher return? There are 3 types of important figures in property investment that we need to understand as below.
1) Return on Property
Profit______ X 100 = Return on Property
Purchase Price
Profit = Selling price – Purchase price – Cost of Selling a Property
Cost of Selling a Property = Legal Fees + Stamp Duty + Agents Fees (if any) + Mortgager Fess (if any) + RPGT (if any)
For example,
Selling price = RM380,000
Purchase price = RM250,000
Legal Fees+ Stamp Duty+ Agents Fees= 10%=RM38,000
RPGT = 30% = RM39,000
Return on Property
= RM380,000 – RM250,000 – RM38,000 – RM39,000__ X 100
RM250,000
= 21.2 %
2). Return on Capital
Profit___ X 100 = Return on Capital
Capital
Profit = Selling price – Purchase price – Cost of Selling a Property
Cost of Selling a Property = Legal Fees + Stamp Duty + Agents Fees (if any) + Mortgager Fess (if any) + RPGT (if any)
For example,
Selling price = RM380,000
Purchase price = RM250,000
Capital = RM 80,000
Legal Fees+ Stamp Duty+ Agents Fees= 10%=RM38,000
RPGT = 30% = RM39,000
Return on Property
= RM380,000 – RM250,000 – RM38,000 – RM39,000__ X 100
RM80,000
= 66.25 %
3). Rental Cash Flow
Net Rental___ X 12 months X 100 = % Cash Flow
Purchase Price
Net Rental = rental per month – monthly loan installment – maintenance fees – property tax (if any) – property management fees (if any) – taxation consultant fees (if any) – utilities fees – depreciation (if any) – ground rent
For example,
Net rental = RM 1,200
Purchase price = RM250,000
RM 1,200___ X 12 months X 100 = 5.76 %
RM 250,000
Hope it help you to analysis and able to optimize your property investment. Do comment at below and share us more how you analysis which property is more higher return?
