1, rental return analysis method
Formula: (monthly after-tax rent-monthly property management fee) × 12/ total purchase price.
The greater the ratio calculated in this way, the more worthwhile the investment.
Advantages: Considering the rent, house price and their relative relationship, it is a simple method to choose "excellent real estate".
Disadvantages: ① Not considering all inputs and outputs, not considering the time cost of funds, which can not be used as a comprehensive basis for investment analysis. ② Mortgage payment cannot provide specific analysis.
2. Rent yield method
Formula: (after-tax monthly rent-monthly mortgage payment) × 12/ (down payment+mortgage payment in the forward house)
Advantages: ① Comprehensive consideration is given to rent, price and main investment in the early stage. ② It is more applicable than the rent refund method. ③ The payback period of investment can be estimated.
Disadvantages: ① The time effect of other inputs and funds in the early stage is not considered. ② It can't solve the cash analysis problem of multiple sets of investments. ③ Because of its inherent one-sidedness, it cannot be used as an ideal investment analysis tool.
3. Internal rate of return method
Formula: IRR= accumulated total income/accumulated total investment = monthly rent × accumulated rent months during the investment period/(mortgage down payment+insurance premium+deed tax+overhaul fund+other investments such as furniture+accumulated mortgage payment+accumulated property management fee).
(Note: The above formula takes mortgage as an example; Do not consider interest payment and agency expenses; Consider the accumulated income and investment during the investment period).
Advantages:
(1) ①IRR method takes into account all the factors such as investment, income and cash flow during the investment period. ② It can be used in combination with the rental rate of return.
IRR rate of return can be understood as deposit in the bank, except that the interest rate of Chinese banks is calculated according to simple interest, while IRR is calculated according to compound interest.
Judging the investment value of real estate by calculating IRR is based on today's data to infer the future. The rise and fall of future rent is unknown. Only one thing is certain: the future of the market is uncertain, and there is the possibility of appreciation and depreciation, just to see which is more likely.
As an investment behavior, investors are concerned about income and risk. Through the analysis of IRR, it is found that the highest correlation is the house price, rent and whether it can be rented out quickly. Because the house price is easy to know, whether it can accurately predict the rent level and choose investment projects has become the key to the success or failure of investment.
Of course, if you think the methods of the above experts are too professional and complicated, you want to know a simple investment formula to evaluate the investment value of a property. It can also provide a simple method for international professional financial management companies to evaluate the investment value of a property.
It is understood that according to their calculation principle, the basic formula to measure whether a real estate price is reasonable is:
If: the annual income of real estate × 15 = the purchase price of real estate, it is considered that the real estate is worth the money;
If: annual income of real estate ×15 >; The purchase price of real estate shows that there is still room for appreciation of investment projects.
According to the usual logic, income includes rent and property appreciation, but the appreciation of property must be reflected by the operating conditions, so it is mainly the estimation of rent. Generally speaking, 10 years will be used as the period for calculating IRR.