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How to find out the value of Real Estate, How Professionals do it

The key to success in real estate investments is the purchase of real estate with high revenue potential at lower market value. This process, which is actually very simple, is usually the determining factor in a successful real estate investment strategy. To buy property below the value of your current or potential income, it is important to conduct an accurate analysis of both the property and its future income. This should be done from the very beginning as a way to discover possible investments. However, to do this accurately, there are some key indicators that need to be considered.

Cash flow

A strong and stable cash flow is the basis of any good investment property, and it can very easily be compared with other similar objects as an indicator of the relative effectiveness of the objects. To calculate the monthly cash flow, simply subtract the mortgage from the properties of your total rent, it should be said that if this number is negative, then it is better to remove, at least for a novice investor.

Cash back

Technically, this is not a very important measure; a refund simply indicates how long it takes for the used Porsche hong kong to pay an advance. The power of cash flow analysis of cash returns is that they essentially compare real estate prices with income levels as a relationship. To determine the cash back to your property, multiply the monthly cash flow by 12, which gives the annual cash flow of the properties, and then divide your initial payment by the annual cash flow.

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Gross income

One of the most basic and sometimes calculated indicators, gross income is simply the sum of all property income streams. As a rule, this will mean the total amount of all rental income, but other income, such as washing or storing cars, should also be taken into account. Adding some of these additional sources of income can turn a property of clearly bad income into a generator of real money.

Actual gross income

A more realistic view of gross property income, gross effective income affects the level of vacancies. It is calculated by taking gross income in the form of an annual amount and subtracting the percentage of vacancies. This is an important filter for a more thorough study of properties that seem too good to be true, often a very low share of vacancies will be in the hong kong property, because the rental rate is too low or the rental rate is very high and, therefore, the Speed ​​is rather high.

Operating margin

Perhaps the first real look at the potential income of the property investor, the net operating income is obtained by subtracting operating expenses from the actual gross income.

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