Would you like to know if a property is expensive, cheap or a bargain?
By location, age and condition of the property or other similar properties it is possible to intuit the market price of the property, but there is another way that is just as valid and that will provide us with even more useful information.
It is about finding out the ratios on the purchase and rental price.
On the first hand, we will have the net rental profitability, which is the result of dividing the annual rental value by the sale price.
(EXAMPLE: € 1,000 per year between € 240,000 gives us a gross profitability of 5%)
If we calculate it in reverse, we will obtain the PER (Price Earnings Ratio). This data tells us the number of times that the annual rental income is contained in the sale price.
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