1. Rental return rate analysis method

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

2 , Rental rate of return method

Formula: (monthly rent after tax - monthly mortgage payment) × 12 / (mortgage payment during the first installment and pre-payment period)

3. IRR Method (internal rate of return method)

Real estate investment formula: IRR = cumulative total income/cumulative total investment = monthly rent × cumulative number of rental months during the investment period/mortgage down payment insurance premium deed tax overhaul fund Furniture and other investments accumulate mortgage payment and property management fees (note: the above formula uses mortgage as an example; interest payments and intermediary fees are not taken into account; accumulated income and investment are all considered within the scope of the investment period).

Extended information

Rental return rate refers to the ratio of monthly rent to the price of the house. Rental return rate measures the return on investment in real estate. For example, in terms of real estate investment, the rental rate of return is a very important indicator to measure whether the property is worth it and whether it is worthy of investment. Because the selling price of houses may be wet and frothy, but there will be no bubble in rental prices. It is the real demand of the market.

Rental return rate is a calculation method for calculating return on investment, mainly for the calculation of investment income in real estate. Investment income can be measured by rental rate of return.

Reference: Baidu Encyclopedia-Rental Return Rate