Real Estate Investment – Information for Investors
We work tirelessly for our Investors to find them the right property to meet their investment goals. We can help the novice investor understand ROI (Return On Investment) and investment risks OR help the seasoned investor make the right decision to meet their goals. Read more…
Simple Steps to Buying an Investment Property:
- Discuss your investment goals with us via phone or contact us.
- Search for properties using the advanced search tab or have us customize a search for you.
- Speak with a lender about pre qualification, contact us for a list of lenders.
- Come view properties with us until we find the right investment.
- We write up an offer for you on a state approved contract.
- We negotiate the deal for you.
- We set up inspections during the 10 day inspection period to determine if condition of property is suitable to you.
- You provide lender with necessary financial information.
- We set up a boundary survey of the property for you.
- We help you secure insurance on the property.
- We close the deal with a state approved title company (seller chooses company in Florida).
How to calculate Return on Your Investment in Real Estate:
Example: You are thinking about purchasing a two bedroom condo for $70,000 and it rents for $750 per month. The tenant pays all utilities but owner pays property taxes, hazard insurance and condo dues. Property taxes are $750 per year, insurance is $550 per year and condo dues are $1800 per year.
Gross Rent per year: $9000
Properties Taxes: $750
Condo Dues: $1800
Net Income: $5900
Return on Investment is Net Income divided by Purchase Price. Therefore, $5900 divided by $70,000 equals a return or capitalization rate of 8.4%. Capitalization Rates are a great way to compare properties on your list so you can make the right investment decision.
Same Example (if you borrowed $50,000 for purchase and would be paying $2000 interest for the first year). That would reduce your net income to $3900 and return to 5.57% ($3900 divided by $70,000).
** Remember two big benefits to investing in real estate are appreciation of property value and being able to deduct a depreciation expense to reduce your taxable income (talk to your financial advisor).**
** Keep in mind that vacancies and maintenance costs have been left out of these examples.**