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Mumbai is a good example of rental yield not following property price. I use the yield to determine if a given property market is speculative or not because re
by nsomaru 5y ago
Mumbai is a good example of rental yield not following property price.
I use the yield to determine if a given property market is speculative or not because rent represents real utility (“yes I would like to live there at that price”)
- carbocation 5y agoThis is interesting. Can you elaborate about Mumbai?
- naveen99 5y agoRental yield in Mumbai: 2-3% https://www.commonfloor.com/guide/price-rent-ratio-grows-in-selected-urban-areas-26011 https://www.commonfloor.com/guide/price-rent-ratio-grows-in-...
- seanmcdirmid 5y agoBeijing rental yield is 1.5% - 2% now officially, it is probably less in reality. Shanghai is around 3%. China and India probably share similar low rent yields in cities with more speculative real estate markets.
- dougSF70 5y agoInteresting, I thought yields should be 7% of capital allocated. Otherwise put it in the stock market. This might mean that 2% yield means leverage, if you borrowed 83.34% of purchase price to buy a property and put in 16.66% of your own money then I guess an allowed 2% yield translates I to 7% yield on the capital you deployed. Provided interest on the loan was 1%...this no doubt contributes to Evergrande potential defaulting.
- seanmcdirmid 5y agoThe Chinese stock market has way too much insider trading for it to be considered a reliable source of investment, unless you have inside information. Your only option to wealth building is to start a company or buy a house.