at present you would think that your yield on your property was 52 weeks X $700 pw / $100K = 36.4% yield p.a
BUT
my lateral thinking is ,,your property is now valued at $650K ..the $100K purchase price is now valued at $650K because of INFLATION
which gives todays values
52 weeks X $700 pw /$650K = 5.6% yield p.a.
Put it another way ..what was your rent when your property was valued at $100K ? now work out your yield from that..
Frack , dont get me wrong , 5.6% is still good , your $100K investment with inflation today is still worth $100Kyesteryear...you have kept up with inflation of sorts... IF you had stuck your $100K in the bank , you would still have $100K and on average over the years received 5.6% interest
BUT
Your $100K cash buying power would have been eroded significantly by inflation over the years.
BUT YOU WON
You have an inflation proofed unrealised capital gain of $550K if you decide to sell , you have kept up with inflation , you have not eroded your asset base... well done !!!!
