3 ways to Evaluate Investment Property like a Seasoned Professional

The 3 best ways to evaluate investment property like a seasoned professional include calculating your Return on Investment, conducting a market analysis and seeking professional advice.

Return on Investment (ROI)

Return on Investment is the net profit/loss divided by its cost and is used to determine how profitable an investment may be profit and performance wise. A higher ROI indicates a more profitable investments and does not consider other factors such as financing costs and the time value of money.

The formula to calculate ROI:

ROI = (Net Profit/Total Investment) x 100

Net profit refers to total income minus all expenses such as mortgage repayments, maintenance costs and management fees.

Total investment refers to the cost price of the property and other costs spent while acquiring the investment property.

Market Analysis

Conducting a comprehensive market analysis will help you evaluate how your investment property is performing against other investment properties in the vicinity. Determining the indicators that suggest a strong and stable market such as high rental demand, low vacancy rates and continuous property appreciation will gauge the stability of your financial goals.

Seek Professional Advice

Consulting with experts who have valuable insights and guidance on the property market, property management and so forth will aid you in evaluating your investment property as a seasoned professional. Property managers can assess if the rent you are requesting is reasonable or not and the best financially efficient ways to improve your investment property. Property managers also have extensive knowledge about the current property market and will provide you with the expert guidance needed to become a professional yourself.