How to calculate its profitability?
When you want to make a rental investment, an indicator must be taken into account: its profitability, in order to know if this purchase is financially attractive. There are three ways to determine it. The calculation of gross profitability makes it possible to compare several goods with each other. To do this, simply divide the theoretical amount of the annual rent (excluding charges) by the purchase price of the property, then multiply this result by 100. More precise, the calculation of net profitability includes the charges that the landlord will have to pay (property tax, monthly mortgage payments for this property, etc.). The previous calculation must be repeated by subtracting these various charges from the annual rent collected. Last calculation: the net-net return, which indicates whether the investment is really profitable. We must resume the calculation of the net profitability and subtract the taxes and social contributions to be paid on the rents collected, without forgetting to take into account the tax advantages (Pinel, Denormandie, land deficit, etc.) to which the lessor may be entitled. (translation by Google translate)
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