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Let say I have 2 properties market price at RM150 each. I have only RM100 equity and remaining was financed with debt cost 4%.
Rental yield (Prop A: 6%, Prop B: 8%)
NPI yield (Prop A: 3%, Prop B: 5%)
Annual NPI would be 150×(3+5)%=RM12
Finance cost = 200 x 4% = RM8
Net dividend = 12 - 8= RM4
If without Prop A, I lose RM9 rental (NPI RM4.5). But net dividend = 150x5% - 50x4% = RM5.5
hope everyone can understand this simplified example. losing low NPI yield could mean better dividend