Property rental is a
passive income dream for a lot of people, which is why you see many people flocking to condo launches these few years.
And the main attraction why property is better than bonds, equities or other asset class is that it is the
easiest for average folks like you and me to leverage up.
Recently, the Singapore Government have been trying to stem this property speculation wave, which have seen property prices climbing like mad.
So how much return can you make nowadays if you try to rent out?
Leveraged Yield Formula
The formula to calculate how much leverage yield as an investor you can garner when you rent out your property can be represented by this generic formula
L = (R – (1-N)*C)/N
where
- L = Leveraged Return
- R = Yield on asset e.g. rental yield, yield on bond
- C = Cost of borrowing e....
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