You must be more than happy

No matter what the task or goal, stay focused and should you feel that new representation is in order. Do so in writing as well as promptly as possible to avoid any complications from the agreement you signed. Just 'cause someone has their license to sell homes doesn't mean they are good at what they do. Ask questions, get it in writing, make sure your getting what you want-"Steering" is illegal. Don't let a sales rep guide you-YOU guide them on where you want to live.

Quitting is the easy part.  What comes after is far worse than the pain you were in when you decided to quit. When you quit you are looking for the immediate gratification of the pain stopping, looking for the feeling that you are done and don’t need to keep going on;  and if feels good!  It feels better than anything else; for about 30 min, but what comes next is far worse. Your brain goes into overdrive.  The questions start to come, what could I have done differently, or asked for help on, or just had some more patience. See quitting is often a permanent solution to a temporary problem. The mind or body is saying that you don’t deserve this, or that it is too hard, or why does this only happen to me. When in fact, it happens to everyone.  The comfort zone is a strange thing.  It allows you to exist and doesn’t want you to push further.  When people get out of their comfort zone the first instinct is to quit; they say this is too hard. When in fact they haven’t figured out an alternative; many times this is just the beginning on the path to greatness.

Feel free to review my LinkedIn profile: https://www.linkedin.com/in/danieldelpriora/ as I am not a fan of broadcasting my sales details on the internet...which will be the topic of my next blog.

 

HAVE THE BEST DAY EVER!!!

4
May

Owning a Rental worth it?

Looking for a simple way to determine if a rental property will give you the rate of return you want?  This modified annual property operating data may be just what you've been looking for. There are varying rates of return that rental buyers consider to determine whether a property will generate a positive rate!  Sometimes the simple calculations can tell you whether you want it. Tax advantages & appreciation  makes it that much better.

The 1st yield we will look at is Cash-on-Cash return.  It is calculated by dividing the initial investment, usually down payment & closing costs, into the Cash Flow pretax.

To get Net Operating Income, simply taking the gross scheduled income, less vacancy allowance & all expenses- deduct the annual debt  which is the principal and interest payment x 12. What's left is Cash Flow Before Tax.

i.e..... the initial investment of the down payment and closing costs, $66,000 divided into the Cash Flow Before Taxes of $5,468 to get an 8.28% Cash-on-Cash return.

The 2nd is called Equity Build-up.  Each payment made on an amortizing mortgage pays a portion toward the principal balance to retire the loan.  It is calculated by dividing the initial investment into the principal contribution for the year.

Continuing with the example, $66,000 is divided into the principal reduction for year one of $4,606 to get a 6.98% Equity Build-up rate of return.

It's easy to understand since you are not considering depreciation, anticipated appreciation, holding period, recapture of depreciation or long-term capital gains. Simply rent the property, pay the bills and if there is money left over, it pays a return on the initial investment.

Same goes for Equity Build-up.  When you make the payment on the mortgage, the loan is reduced and while you don't have access to the money like cash flow, it is definitely your equity!!

To determine whether an ROI on a rental is good, compare it to what your initial investment is earning currently.  Ten-year treasuries are earning less than 2%.  Certificates of deposit are earning less than 1%.

For more information, click:  Rental Income Properties  & schedule an appointment with me to get to work for you!!

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