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3 Important Calculations Every New England Real Estate Investor Needs to Know

3 Important Calculations Every New England Real Estate Investor Needs to Know

Real estate investing is all about generating future cash flow, and finding the right investment properties to meet your income goals while balancing investment risk is crucial. When diving into the world of real estate investment, it’s essential to seek guidance from trusted family and friends or reach out to industry professionals to help you navigate this new business venture. While the location of your properties can add long-term value, property management plays a critical role in the success and health of your real estate holdings. As an investor, it’s important to review the books and ensure that, at the very least, you can match the performance of the previous landlord to achieve the same results.

To achieve the highest possible return on investment, every real estate investor must focus on the numbers that play a pivotal role in the outcome of each investment. Professional investors are intimately familiar with the calculations that help them make sound investment decisions. For instance, cash flow helps determine the monthly income you can expect to generate, while the cap rate provides insight into the current market value and cash-on-cash return, allowing you to understand the difference in the return on each investment dollar. As a New England real estate investor, it’s essential to know three critical calculations that can help you achieve your investment goals. However, it’s essential to note that this article is for informational purposes only and not intended as financial or legal advice.

Cash Flow

Real estate investors have one primary goal: generating positive cash flow from rental properties after covering all monthly expenses. As you pay down your mortgage over time, your cash flow from the property will increase, providing a secure income source for your retirement years. Rental income is an excellent hedge against inflation, as rental rates tend to keep pace with the increased cost of living. To maximize your investment potential, it’s important to understand the critical calculation of cash flow. Professional investors like Old Harbor Properties can help you navigate the numbers and gain insight into the potential income and expenses associated with real estate investment. The team of professional investors at Old Harbor Properties can also help you find the best location to ensure long-term value and higher returns while staying within your budget and leaving room for unexpected expenses. By partnering with Old Harbor Properties, you can feel confident in your investment decisions and focus on generating positive cash flow from your rental properties.

Cap Rate

As seasoned investors will attest, adding new properties to your real estate portfolio requires careful consideration and strategic decision-making. Cap rate, a tool used to compare properties, plays a crucial role in this process. By evaluating the expected rate of return based on annual rental income, investors can identify the most promising investment opportunities. Calculating cap rate involves dividing net operating income by the current market value, providing a reliable measure of investment potential.

At Old Harbor Properties, our team of professional investors takes pride in their ability to analyze potential return on investment (ROI) and forecast potential losses. Armed with a deep understanding of the market and years of experience, our experts can guide you through the complex calculations and comparisons required to make sound investment decisions in New England. We offer you access to a wealth of tools and expertise that will help you succeed in the dynamic and competitive world of real estate investing. By partnering with Old Harbor Properties, you can take confident strides towards building a strong and profitable real estate portfolio.

Cash on Cash Return

One of the most important calculations that every New England real estate investor needs to know is the cash-on-cash return formula. This calculation shows you how much money you can earn based on the cash you’ve invested, indicating how hard your money is working for you. Unlike the total cost of the asset, the cash-on-cash return only uses the amount of cash invested in the deal. This calculation is a ratio between the annual net operating income and the total cash investment, making it a valuable tool for investors. Professional investors like Old Harbor Properties can help you understand the results when you compare investment properties and provide insight into which property can provide the best return on your investment. The team of professional investors at Old Harbor Properties has the expertise to guide you to the best investment property available in New England. By partnering with Old Harbor Properties, you can be confident that you have access to the tools and guidance necessary to make sound investment decisions and maximize your returns.

At Old Harbor Properties, we understand the calculations and tools that are necessary for successful real estate investment. Our team of professional investors is knowledgeable about the local market in New England, as we are your neighbors here. When you partner with Old Harbor Properties, you have access to a full-service in-house team of industry specialists with an investor’s mindset, which can save you time, money, and headaches. We bring all the necessary tools and expertise to the table, from locating investments and running the numbers to guiding you through the ropes of the real estate investment business all the way to the closing table. Additionally, our highly regarded property management team at Old Harbor Properties can take on as many of the duties of a landlord as you like, from tenant screening to on-site management of large complexes. By partnering with Old Harbor Properties, you can feel confident that you have access to the tools, expertise, and services necessary to succeed in real estate investment. To learn more about what Old Harbor Properties can do for you, call us at (781) 549-0271.

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