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…
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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