My Real Estate Tip

Real Estate Investing

You find an investment property. Now what information will you need to make an informed decision? One investor tool is to look at a detailed before-tax and after-tax assessment  of the property's projected yield. To estimate projected yield, know the following: your current tax bracket (ask your accountant); your current savings rate; minimum years you intend to hold the property;  the amount of cash you intend to put down; appreciation rates; and the approximate rental income. Now use the power of leverage for your investment by utilizing a loan on the property and reducing the amount of your own money for the downpayment. When you leverage, your rate of return is increased.

Let's say you purchase a property for $100,000 cash and it goes up 5%. You will have earned 5% on your money plus the amount of rent collected (less expenses). However if you purchased the property with 10% downpayment and a $90,000 loan, your rate of return will be 10 times greater or 50%.

Having numbers that support your real estate investment goals will make the difference on your deciding which property best suits your objectives.

Contact Nikki direct at 808-372-5543 or email: nikki@nikkiorourke.com

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