Rich Harvey
speaker
1,863 appearances
17 recordings
1 series
first heard Jan 2022
last heard Oct 2022
Rich Harvey’s voice in public audio — every appearance, attributed to the second.
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Appearances
One is through rental return, that's your yield, and the other is through capital growth.
So the yield or the cash flow, that refers to the income that your property is generating.
And it's normally expressed as yield, which is a percentage of the rental income you earn for every dollar of the property's value that you purchase.
So I'll give you an example.
Let's say you buy a property for $600,000.
and the tenant pays you $500 a week.
That equates to $26,000 a year in rent.
So what that means is that'll equate to an annual gross yield of 4.3%.
So that's how we express yield or cashflow.
On the other hand, capital growth or capital gain is expressed as a percentage of the property's value.
If you bought that property for 600,000 at the start of the year,
And in 12 months time, the property had risen to $660,000.
That's a $60,000 gain.
That's a 10% increase in capital value.
So they're pretty simple concepts to understand.
Look, I disagree.
I think you can have both.
You can have your cake and eat it too, but to different degrees.
You can't always get both capital growth and cash flow in the same property, in the same location, depending on where it's located.
So I believe that smart property investors can get both if they know where to choose the right location and match the right property type in that location.
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