That is net yield for a cash purchase.
Example: Morningside Brisbane.
3bdr 2 bathroom townhouse 550k
Weekly rent $600
Annual gross rent less 7.5% estate agency
= $29,023
Less rates & insurance at $3,500
= $25,523
Add back tax benefit of depreciation (2.5% of building cost @ $200k) = $5000 depreciation x 42.5% = $2,125 benefit
= $25,523 + $2,125
= $27,648 annual return
$27,648 / $550,000
= net rent yield of 5.02%
Then add any capital gains on top.
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