Purchasing a retirement home can be a stressful process due to the many factors to weigh.
As people get older and their housing needs change, retirement property is one way to explore. It is important to reduce the housing problems that people often encounter later in life by choosing the appropriate housing. The rental yield of these properties, as well as how to calculate it, is another crucial factor to consider.
This basic rental yield formula can be used to calculate rental yield:
Rental yield = (Monthly rental income x 12) ÷ Property value
We’ve broken down how to measure a rental yield using this formula:
- Multiply the monthly rental income or projected rental income by 12 to get the annual rental income.
- Divide that by the selling price or existing market value of the home.
- To calculate the percentage, multiply this estimate by 100.
- Your monthly rental income is: £1,500
- Your annual rental income is: £1,500 x 12 = £18,000
- You purchased the property for: £300,000
- Your rental yield is: (£18,000 ÷ £300,000) x 100 = 6%
What is a Decent Percentage of Return Yield?
It’s a subjective thing, which isn’t going to help you. Some people claim that anything near 5% is a successful yield, while many others believe that 8 is the magic number.
Any property with a return yield of 7% or higher is, in our experience, incredibly good.
Luckily, there are plenty of software that will do this for you. One of the most popular is DealSourcing. This PropTech Software has improved this process and turned it into a platform that acts as your personal property sourcer. Thanks to algorithms and automation, the system can recognize properties from all over the internet and sort them by ROI. Deal Sourcing’s retirement properties search facility allows you to locate properties built especially for older residents.
These developments, which are built especially for the needs of the retired and help preserve independence and quality of life, offer residential care and other resident-friendly features. These retirement communities also have the stability, peace of mind, and social lifestyle that comes with living in a community.
It saves you time, money, and effort! The ability to find High Yield Assets is the platform’s key main feature. If you’re looking for UK Retirement Properties, DealSourcing.co is a no-brainer.
The app also measures the return on investment on every property on Rightmove and recognizes properties for sale at a discount from market value, saving investors hours of research time. The most significant benefit of using a property sourcer is getting access to the top property prices available.
In addition to the retirement specific advantages, there are numerous other advantages such as:
Simplify the relocation process
- When you purchase a new retirement home, you will be able to move in as soon as it is completed.
- You don’t have to waste money or time redecorating or restoring your new home. Some modern home builders also allow you to design your new home before it is completed, allowing you to decorate it exactly to your liking.
The Top 3 Most Useful Use Cases of DealSourcing.co:
- BTL & HMO Deal Analyser
They measure the cash balance for each transaction without the use of a spreadsheet or chart. Calculate the total price, including all costs, Stamp Duties, revenue, and also the possibility of leaving money on the table.
- Find High Yield properties by location
They examined information from almost 500,000 homes in England, Scotland, and Wales. Their primary purpose is to figure out which postcodes have the highest buy-to-let yield.
- Find negative equity properties by location
If a property is worth less than the mortgage secured on it, it is said to be in negative equity. They assist you in locating those offers based on your geographical area.