Formula: (monthly after-tax rent-monthly property management fee) × 12/ total purchase price.

2. Rent yield method

Formula: (after-tax monthly rent-monthly mortgage payment) × 12/ (down payment+mortgage payment in the forward house)

3. Internal rate of return method

Real estate investment 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).

Extended data

Rent return rate refers to the ratio of monthly rent to house price. The rental rate of return measures the investment income of real estate. For example, real estate investment, rental return rate is a very important indicator to measure whether real estate is worth investing. Because house prices may bubble, but rents will not bubble. This is the real demand of the market.

The rental rate of return is a calculation method to calculate the return on investment, which is mainly used to calculate the return on real estate investment. The return on investment can be measured by the rental rate of return.

References:

Baidu encyclopedia-rental return rate