IT IS ALL ABOUT UNDERSTANDING THE "NUMBERS"

 

Buying investment real estate is a "numbers game" like many investment opportunities.  When the price is right, the cash flow is positive, the property is appreciating and the tax incentives are available, it is a good investment.  Making all of the "numbers" work with a positive cash flow requires the investor to take the time to understand the numbers. 

Members of our team have owned investment Real Estate for many years.  I have owned residential investment properties since 2001.  The rentals are not difficult to keep occupied and require some attention but overall it has been a positive experience. 

Let me share my experience with you on how to ensure that you:

  1. Make the right type of purchase for the "right" price.
  2. Inspect the property to determine the condition of the investment.
  3. Understand how to find the "right" tenants.
  4. Determine if the property cash flow is positive.
  5. Evaluate the risks
  6. Have FREE cosultation before and after the purchase.

To help in determinig if a investment property has positive cash flow, I have a detailed RETURN-ON-INVESTMENT Spreadsheet that provides the answer.  You enter the income and expense "numbes" and it will calculate your % ROI. 

LOOKING FOR AN INVESTMENT PROPERTY?

    Here is a sampling of some questions and tips in purchasing the right investment property:
  • What kind of time do you have to invest in the property?  If you are working a full time job, then you have to buy a place that is move-in-ready and maintenance completed by an association or the tenant. 
  • If you have the time to fix-up a property, a property requiring repair may be right. Ensure you understand and (over) estimate the repair costs and enter them into the ROI Spreadsheet as your investment costs.
  • Screening tenants is a must.  It is better to have the rental sit empty for a month versus getting a problem tenant.  I charge an application fee and use a service for a credit & background check.
  • Know where is advertise your property and what the rental value is for the area.  The rental value will become part of your ROI calculations.
  • Understand all of your costs including mortgage, utilities, association fees, vacancy rates, etc. and account for them before your invest.
  • Determine your tax incentives, deductions, depreciation, etc. Know your tax bracket to determine savings.
  • Be ready to rent the property in today's very active RENTAL MARKET.  Is there a city inspection required, are all the repairs complete, is the rental unit clean, do you have all of the paperwork ready.
  • Understand how investment ROI (Return on Investment ) is calculated.  You should not consider any investment with less than a 10% ROI.  

To help assess the ROI, I have a ROI spreadsheet that allows you to enter your income and expenses as well as your tax rate and have the ROI calculated for you.  I can also share with you forms such as the Walk-thru, direct deposit, application forms, rules and regulations, and more depending on the type of rental.


Coldwell Banker Burnet - Ken Tibesar - 576 Bielenberg Drive Ste 100 - Woodbury, MN 55125
Phone: 651-263-0522   Email: kgtibesar@cbburnet.com

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