Return rate of shops
With the national policy to suppress the property market, more and more people will turn their attention to store investment, in fact, not all store investment is a steady income of the business, which needs to invest in stores before the store investment return rate is carefully calculated. How to calculate the rate of return on investment:
1, the rental return method
Formula: (after-tax monthly rent - mortgage monthly payments) × 12 / (the first payment + mortgage payments during the period of time). Advantages: Taking into account the rent, price and the main inputs in the early stage, it is more widely applicable than the rental return analysis method, and can estimate the length of the payback period.
Deficiencies: did not take into account other inputs in the early stage, the time effect of funds. Can not solve the problem of cash analysis of a variety of investments. And because of its inherent one-sidedness, can not be used as an ideal investment analysis tool.
2, rental return analysis method
Formula: (after-tax monthly rent - monthly property management fees) × 12 / purchase of the total price of the house, the larger the ratio calculated by this method, it indicates that the more worthwhile investment.
Advantages: Taking into account rent, house price and the relative relationship between the two factors, it is a simple way to choose "high-performance real estate".
Weaknesses: Does not take into account the full range of inputs and outputs, and does not take into account the time cost of capital, and therefore cannot be used as a comprehensive basis for investment analysis. No specific analysis can be provided for mortgage payments.
3, the internal rate of return method
Property investment formula: cumulative total return/cumulative total input = monthly rent × cumulative number of months of rental during the investment period / (mortgage down payment + insurance premiums + deed tax + overhaul fund + furniture and other inputs + cumulative mortgage payments + cumulative property management fees) = internal rate of return.
The above formula is based on a mortgage for example; interest payments and brokerage expenses are not taken into account; cumulative returns and inputs are all taken into account within the investment period.
Advantages: The IRR method takes into account all inputs and returns, cash flow and other factors during the investment period. It can be used in conjunction with rental return. The internal rate of return can be understood as depositing in a bank, except that our bank interest rate is calculated on a simple interest basis, while the internal rate of return is calculated on a compound interest basis.
Deficiencies: the calculation of the internal rate of return to determine the investment value of the property are based on today's data to extrapolate the future, while the future rent of the rise and fall is an unknown.
4. Simple International Appraisal Method (SIA)
The basic formula is: if the annual return of the property x 15 years = the purchase price of the property, the property is considered to be good value for money. This is a simple method for international professional finance companies to assess the investment value of a property.
Expanded Information:
Shop is a real estate dedicated to commercial business activities, is the operator to consumers to provide goods transactions, services and feel the experience of the place. Broadly speaking, the concept of stores, the scope of its not only includes retail business, but also includes entertainment, catering, real estate used in tourism, profit-making exhibition halls, sports venues, bathrooms, as well as banks, securities and other business with the physical presence of the building of the business transaction place. Stores as a place of trading, from department stores, supermarkets, specialty stores to automobile sales stores are trading places for goods of varying sizes.