Kavitha Menon's Blog

Kavitha Menon |  kavitha@ppfas.com Like equity, property purchased for investment purposes needs to be evaluated both quantitatively and qualitatively. Of the most common and simple ways of quantitatively evaluating value of a property is by rental yield. Both potential buyers as well sellers can use this tool to decide on the true price of a property.  Here is how you calculate rental yields Net Rental Income = Monthly Rental X12        Less: 1) Rent for the Period Unoccupied        Less: 2) Brokerage Expenses        Less: 3) Maintenance Expenses        Less: 4) Tax payable on rental income        Less: 5) Repairs and Maintenance expenses amortized        Net Rental Yield = Net Rental Income/Current Property Value Needless to say a high rental yield indicates an undervalued property while very low rental yields could mean that the property is overvalued. If you intend to fund the purchase of property with a mortgage loan you could look at how much positive cash flows

Asset bubbles have been around for centuries. Although we humans have grown in leaps and bounds in areas of science and technology, when it comes to stock market behavior our instincts are as primitive as ever. As always the ongoing correction and volatility have started sending blood pressures soaring. Investors want to know, to what level will the market correct? How long will the trend last? , will FII dump stocks like they did in the 2008 meltdown? Unfortunately I don’t have the answers .Neither do the gaggle of fundamental and technical analysts offering you their expert views on various market channels . Corrections are only a mechanism to purge the market of all imperfections and excesses. It is a friend of the value picker and long term investor. Then why do we fear market corrections? 1 ) We are not sure of the real ‘value ‘of the equity we hold . Let take a little example here. Let’s say you and your friend found two beautiful teak wood tables at 'Chor Bazaar' for

Asset bubbles have been around for centuries. Although we humans have grown in leaps and bounds in areas of science and technology, when it comes to stock market behavior our instincts are as primitive as ever. As always the ongoing correction and volatility have started sending blood pressures soaring. Investors want to know, to what level will the market correct? How long will the trend last? , will FII dump stocks like they did in the 2008 meltdown? Unfortunately I don’t have the answers .Neither do the gaggle of fundamental and technical analysts offering you their expert views on various market channels . Corrections are only a mechanism to purge the market of all imperfections and excesses. It is a friend of the value picker and long term investor. Then why do we fear market corrections? 1 ) We are not sure of the real ‘value ‘of the equity we hold . Let take a little example here. Let’s say you and your friend found two beautiful teak wood tables at 'Chor Bazaar' for