Amy Lunardi

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1,235 appearances 4 recordings 1 series first heard May 2020 last heard Dec 2022

Amy Lunardi’s voice in public audio — every appearance, attributed to the second.

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Australian Finance Podcast · Property investing 101, Ft. Amy Lunardi · 27 Jul 2020 podcast

And when we determine that we're going to buy an investment property, we need to then say, okay, if capital growth is my strategy, what are the things I can control?

And then how do I then choose all of those other things to make sure that I get the best growth possible?

And that is obviously easier said than done, but it's something that we need to understand.

And then if we talk about yield, so the yield on a property is the way that you calculate it is you take the monthly rent and then you times it by 12 or you take the weekly rent and times it by 52.

So you basically get

your gross annual rent, and then you divide that by the purchase price.

So that gives you a gross yield.

For example, you might end up with, say in Melbourne, if I'm talking about an apartment, it might be 4%, 4.5%.

So that is your return that you're getting through your rental income.

Now there's an inverse relationship between growth and yield.

So like I'm sure you have in the share market, the stronger growth that you get

the lower the yield is.

So the higher out of pockets it costs you per month to contribute towards that property.

So you're negatively gearing a lot higher in order to get that growth.

Because if you had high growth and high yield, everyone would be excited about that.

Everyone would buy those assets, which would drive the price up and drive the yield down.

So that's just a really general way of explaining it.

Now,

When we're talking about yield, the ways that a property will generally get a higher yield, so this is a higher rent in terms of comparing it to the purchase price, it'll generally mean that our land component is smaller because tenants rent the dwelling, not the land.

So if we look at, say, for example, a house on a full block and it has a big backyard versus the one next door which is the exact same house but potentially that land's been subdivided into two so there's another house in the backyard now, the rental income on those properties will possibly be pretty similar but the purchase price for the one on the bigger piece of land will be much higher so therefore our yield is lower.

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