Return on Investment in Orlando and Central Florida Real Propery Investing

As a general rule, homes appreciate about five percent a year. Some years will be more, some less or might be negative. The figure will vary from neighborhood to neighborhood, and region to region.

Five percent may not seem like that much at first. Stocks (at times) appreciate much more, and you could earn over six percent with the safest investment of all, treasury bonds. But in real estate, you don't calculate it that way. Read more below...

Understand My Basic Example:

Presumably, if you bought a $200,000 house, you will finance 90% by having a mortgage and putting down 10% which is $20,000– that would be an investment of $20,000.

At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $20,000. Your annual "return on investment" would be fifty percent.

Of course, you are making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase. If this is an income property, meaning rented by tenant. That tenant is financing your wealth.

Try calculating using an appreciation rate of 3% ( very slow real estate market) , 8% , 20% or 30%. Also try calculating using a different investment value of your property. So, If you can borrow at 8% but make a return of 20%, it does make sense to invest in real estate. Your rate of return when buying investment property is higher than most any other investment you could make. Please also remember Four important elements in real estate investing,  Location,Condition, Financing and Time.

By being alert and sensitive to trends, you will know when to buy, when to sell, when to build and when to hold on to your investments. Facts on neighborhood trends, the city's economic health and the general state of the national economy are essential to accurate assessment of a property.

Still not sure of what you're doing, and you need to know where to get money to buy your investment property?  Send me an email, I can provide you a free consultation.

1. Equity financing?

2. What is leveraging? How do you know if you are highly leverage

3. Principles of Pyramiding?

4. What is OPM ? ( other people's money)

5. US Monetary Policy and how it affects financing.

6. Emerging market.

7. What is Supply and Demand?

8. Business Life Cycle. What about the real estate market cycle.

9. What is Globalization and Outsourcing? And how it affect our current local market.

Advantages that real estate offers that other forms of investment can't offer:

1. It is a hedge against inflation- as things become more costly, so does your property-many times it is faster than the inflation itself;

2. Tax Shelter-yearly interest payment plus property taxes on your home multiplied by your tax bracket, the sum will be your tax savings.

3. Finance it using other People's money (OPM). Meaning you borrow money.

4. The property, if structured properly, pays for itself as it goes along.