IFA-Bulletin Knowledge Base

We have put together a series of articles and factsheets that we hope you will find both interesting and useful. Please don't forget to check back from time to time to catch up with the latest updates. In addition we will be running features on various aspects of buying property and living abroad along with expert articles bringing you the latest in financial products and services associated with investment property

If you would like to automatically receive a notification whenever a new article or feature is added or updated please register here

Listed below are some of the more common rental property financial and return definitions

Annualised net rents

Gross rents plus, where rent reviews are outstanding, any increases to estimated rental value less any ongoing property costs

Estimated Rental Value

The estimated rental income based upon local knowledge and similar property styles/conditions etc

Initial Yield

This is the annual net rents generated, (by a portfolio of properties if applicable) expressed as a percentage of the property (portfolios) value

Interest Cover

Is the number of times the net interest payable is covered by the annual net rental income.

Real Estate Investment Trust (REIT)

A trust that invests primarily in real estate and mortgages and passes income, losses, and other tax items to its investors.

Mortgage Ratio

Calculated by dividing the total amount of the mortgage/s or loan/s by the appraised or market value of the property/ies.

Development construction cost

This is the total cost of developing a property excluding site values and finance costs

Gearing

An analysis of the level of long term debt to equity capital expressed as a percentage

Net rental income

Total rental on the property/ies less property operating costs

Open market value

The estimation of the current property/ies value based on similar properties/sales values/conditions/market situations etc

Passing rent

Also known as gross rent represents the total annual rent before costs

Reversion

An estimation of an increase in rental income where the current rental income is below market rates usually affected by rent free periods, rent reviews or the letting of vacant property

Reversionary yield

The anticipated initial yield reachable when the rental income estimated rental value

Securitisation

A financial term to indicate that the rental income is used to service the interest and principal payments on for example a mortgage

Vacancy rate

The estimated rental value of a vacant property/ies shown as a percentage of the total estimated rental income of the property/ies.

Back to the Knowledgebase

Join us today

Earn and Save make great partners

If you an Estate Agent, Accountant, Solicitor or Independent Financial Advisor then we are currently looking for additional motivated agents who strive to offer their clients well researched and vetted investment opportunities in a safe and secure process. What we offer is excellent commission rates for driven and ambitious business introducers backed up with a full ongoing marketing and support package.