Asked by Patrick Puah
Hi, How do you calculate the PE ratio of a condo or pte property?
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1 Answer
Hi Patrick, PE ratios do not usually apply to properties. Rental yields are most widely used as the gauge as the (earnings) are the rents.
For example, if you buy a property at $1,000,000 and subsequently rent it out for $3,500 per month, your rental yield is the annual rent income divided by the purchase price. (3,500 x 12) / 1,000,000 = 4.2%.
Rental yields above 4% is generally considered good.
Richard Wan
Black Diamond Real Estate
richardwan@live.com
94363793 Read More
For example, if you buy a property at $1,000,000 and subsequently rent it out for $3,500 per month, your rental yield is the annual rent income divided by the purchase price. (3,500 x 12) / 1,000,000 = 4.2%.
Rental yields above 4% is generally considered good.
Richard Wan
Black Diamond Real Estate
richardwan@live.com
94363793 Read More