Analyzing investments is understanding the basics
When considering real estate investment, its best to learn from the experts. Experts know that success starts with understanding the basics of property investment, and we want to share that knowledge. When it comes to property rental investments, there are a few key basics that will unlock a well-formed perspective on the worth of your investment, and this understanding will lead to strong investment decisions.
Investment Basics for Rental Properties:
- Cap Rate (Capitalization Rate)
- ROI (Return on Investment)
The Cap Rate measures the rate of return on a rental property while ROI is used to monitor how well an investment is performing.
“Sometimes you’ll hear investors claim that using cap rate to measure income-producing property is better than ROI, or vice versa. The fact is that both the cap rate formula and ROI calculations are key tools to use when analyzing the performance of rental real estate.”
Thank you for reading. As always, feel welcome to contact our team for further information.