Not sure how it works in the GWN, but something to consider in the US:

Non homestead taxes will be considerably more.
Insurance should be less than owner occupied.
Going to manage it yourself?
Rental certificate/inspections?

Not sure what the market is like in your area.
I tried to factor in about a 75% occupancy rate

mrlandlord.com

Forget about all that gobble goop, what are the going rates for your type of property in the area? Doesn't matter what your numbers come out to, if the local rents won't support that it is moot. And you may be even leaving money on the table if your cost structure is low to begin with. You might actually get a lot more than your formula says too, so just get that going rate number first then see if it even fits...

I'm just trying to figure out the minimum we need to earn to make this profitable, the way I have it figure out right now - we need to charge about $100 more than the market will bear to break even. However, I have a feeling my maintenance budget might have a high premium. OTOH I don't want to be caught off guard without funds available either.

 the way I have it figure out right now - we need to charge about $100 more than the market will bear to break even. //

Ok gotcha, you know the market forces at work in your area. So yes now you have to decide if you can get a pretty large+ on that for some tangibles/intangibles that other places might not have. Maybe furnished or some laxer rules in the contract? Month to month should get more $$ than a lease, if you know the people are solid, maybe not so much of a deposit, things like that...

Here in the US I was going through this same exercise about 4 years ago. When researching insurance, I discovered that to insure a building that you personally do not occupy is much more expensive than if you are the owner and tenant. And.....there are far fewer companies that underwrite that type of insurance than you would think....

Mine were cheaper than my house--Single family homes., not insuring anything in the house.

Been 10 yrs though.

2 points

I have been renting property for a decade. In that time on the maintenance front I have replaced one fridge, one boiler and had one flood. None of which caused the tenants problems for more than a day or so.

Rental yield had been approximately 4-5% of value

However in the last 18 months i have had one apartment burn down and I am being sued by a former tenant from another house.

I am in the process of liquidating our entire portfolio because the stress is driving me completely insane at the moment and when the yields are historically as good or better in a vanguard index why would i do this.

I am not being sued because I had a terrible tenant or was a slum landlord. I am being sued by a policeman who broke their word and the property rents for 4.5k a month.........

I would suggest that unless You are happy to deal with all the BS (which i have been for more than a decade until I wasnt) don't do it. If you are and its materially more beneficial than alternative investments do it.

You're 100% spot on with this. We have bought and sold 30+ units over the past decade as investments. I will say that the yields we have seen are similar but the capital appreciation has been pretty stellar.

The last few years have been the worst from a BS perspective. The sense of entitlement has grown to be too strong to deal with (and valuations are so frieking high in our market that it's a pretty good time to get out).

I will throw in some red meat for the LR...my observation is that the worst tenants are the white males. Every single issue I have ever had has always been with a white male, usually between the age of 25-45 (a group of which I am a member). If I could exclusively rent to new arrivals to the US I would in a heartbeat!

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My training

I am 100-120% up on two. Completely neutral on the fire one but when it's handed back it does come with a new 10 year building warranty so that's ok.

The problem is the cash flow has murdered my sanity (that, and french wealth tax, french income tax, french property tax amongst others.......)

So we are getting out of everything. Even our primary residence. We are going to go back to uk. Put 50% in to house to live in for cash and 50% in trackers and forget about it.

The markets are all tapped out now so i am cutting my losses and by end of year will be fine......i hope.

One component not yet mentioned is the benefit of a tax shelter. Work with your CPA to see how keeping (gains or losses in maintaining the property) or selling (capital gains) would impact your calculations.

Good point. Were it not for the fact mine were all primary residence at some point cgt would have seriously adversely affected annual yield.

Maintenance averages $400-500/unit per year

In addition, many carry a replacement reserves account, essentially a sinking fund to save money for replacement of short lived building components. 1.5 to 2% of effective gross income for this.

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I'll be what I am
A solitary man

Read the Bigger Pockets site.

From what I recall, they recommend estimating 50% of your rent in unallocated overhead. With the remaining 50% you subtract mortgage, insurance, etc. If you have a profit, it's a potential investment.

What is unallocated overhead?

I've rented for a decade. My cost are

Mortgage debt
Property tax depending on type of contract
Tax advice - does my tax returns rather than an accountant
Maintenance
Capital investment
Insurance
Agents fees

Current rent - 40k
Mort 12k / yr
Tax 0
Accountancy 1k
Maintenance since contract start .1k
Amortized capital approx 5k
Insurance for contents and rebuild .7k
Agents fees 3k

How do you ever get to 50% unallocated overhead?

As you have described it, if I have understood it, applying 50% costs off the top is bonkers before mortgage.

Maintenance to the property. I'm not telling you that it's practical or real life by any means. I was just telling you that's what the folks at Bigger Pockets recommended to make sure you ended up profitable in the event of a disaster tenant.

http://www.biggerpockets.com

It's a great resource for investment property. You'll probably find in depth answers to the question you posted.

They may have a point though in my case it was not tenants it was a fire and cost me 150% of one years rent before insurance paid out......

I used to frequent there but just got tired of all the pitches, and quite frankly the newbies asking the same stuff. But yes, good place to learn & free if you invest your time...and 1000% better return than the scam (ahem, "educational") clinics that get pitched.

I just use this now when assessing properties + figure 15% unoccupied vs the standard 5-6% in order to build a cushion: http://www.calculator.net/...erty-calculator.html

Personally speaking, I won't do a rental unless there is recognizable capital appreciation upfront. And those are few & far between. Still a decent hedge against inflation as you can lock in still-very-low rates, but the PITA/BS factor makes it a poor ROI from a time & energy standpoint. Vacation rentals are still solid though, but that is a bigger PITA factor.

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"There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs." John Rogers