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Calculation of return

Sample calculation of return on a rented multi-family house.

Financing structure

 

 

Purchase price (incl. incidental purchase costs)

- Equity share (30%)

- Debt share (70%)

1'900'000 Fr.

570'000 Fr.

1'330'000 Fr.

                 

Rental income

 

Annual rental income

(excl. incidental costs)

95'000 Fr.

 

  

Direct expenses

 

 

Administrative costs 1

Maintenance costs 2

Rent protection cover 3

4'800 Fr.

8'200 Fr.

2'800 Fr.

  

Gross yield

 

Earnings before interest, taxes, depreciation and

amortisation (EBITDA)

79'200 Fr.

 

  

Other expenses

 

 

Mortgage interest 4

Depreciation 5

Income taxes 6

26'600 Fr.

15'000 Fr.

18'410 Fr.

  
Net yieldNet profit19'190 Fr.  

 

Assumptions:

1 5% of annual rental income

2 CHF 25 per sqm of living area

3 3% of annual rental income

4 2%

5 Straight-line depreciation of the building over 80 years (building value: CHF 1.2 million)

6 35% marginal tax rate (calculated on the net profit of CHF 52,600 before depreciation)