If you are thinking of buying a property for investment purposes, what is a good gross yield?
I've been told you should take 3 zero's off the price of the property, so if a property is worth 400,000, it should be rented out at $400 per week.
That works out at a gross yield of about 5.2%.
That seems to be normal for my area right now, but is that good historically? Cause in stock terms, a 5.2% yield works out to be a price/earning ratio of about 19:1, which I think is fairly high and what you'd expect from high growth stocks.
And 5.2% is the gross yield, that's before taking into account things like maintenance costs, land taxes, rates etc.