Folks, one of the most important things to remember when buying a property is to buy with logic, not emotion. What I mean by this is to work out the ROI to ensure that the property you plan on buying is worth it in the long term.
I bet you are sitting there thinking, Samuel, how do I do this?
- You need to consider how much money you are putting IN the deal, for example: deposit, any refurbishments, legal fees, stamp duty etc.
- How much annual PROFIT are you going to be receiving from the property.
Take the annual profit minus the expenses (typically 20%) which can be anything from management fees, mortgage, maintenance, divide it by the total investment x 100
Write this down…
Annual Profit
Total Investment
100
There you have it, your annual ROI!
Before considering to buy any property, you need to ensure that the ROI is 20% or above and on top of this, you are going to benefit from capital appreciation.
Thanks for reading guys, catch you next time!
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