02-01-2011, 12:43 AM
Agreed with yeo and bluestamp.
I believed it's mentioned somewhere in intelligent investor on this example.
As an investor, you are supposed to make the capital allocation decision and capital should go where it is best treated.
In this case, if we are just using yield as a means to evaluate, then we should benchmarked against the current market price as highlighted by bluestamp.
Some property investors also used historical purchase price to "boast" about their rental yield.. but it is not correct in my humble opinion.
I believed it's mentioned somewhere in intelligent investor on this example.
As an investor, you are supposed to make the capital allocation decision and capital should go where it is best treated.
In this case, if we are just using yield as a means to evaluate, then we should benchmarked against the current market price as highlighted by bluestamp.
Some property investors also used historical purchase price to "boast" about their rental yield.. but it is not correct in my humble opinion.