1, the rental return method
Formula: (after-tax monthly rent - mortgage monthly payments) × 12 / (the first payment + mortgage payments during the time of the term house).
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 capital recovery period.
Deficiencies: does not take into account other inputs in the early stage, the time effect of capital. Can not solve the problem of cash analysis of multiple sets of investment. 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 / buy the total price of the house this method of calculation of the larger the ratio, it is shown that the more worthwhile investment.
Advantages: It is a simple way to choose "high-performance real estate" by taking into account rent, house price and the relative relationship between the two factors.
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. Cannot provide specific analysis for mortgage payments.
3, the internal rate of return method
Property investment formula: cumulative total return / cumulative total input = monthly rent × investment period of the cumulative number of months of rental / (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 as an example. Interest payment and agency fee expenses are not considered. Cumulative returns, inputs are considered within the investment period.
Advantages: The IRR method takes into account all inputs and returns, cash flow and other aspects of 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, and 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. This is a simple method for international professional finance companies to assess the investment value of a property.
Commercial real estate investment value
1, the investment risk is small
Investment in commercial real estate can sit and enjoy the benefits of the appreciation of its assets, daily life, work is not affected. The company's business is a very important part of the company's business, and it is a very important part of the company's business, and it is a very important part of the company's business, and it is a very important part of the company's business. Up okay, once trapped, involving the whole family, so people are physically and mentally exhausted, chicken and egg. The house can be seen and felt, is a real thing, not to mention the commercial real estate can bring double income, annual rent and rent is much higher than the bank interest, and with the rise in rent, commercial real estate is also increasing in value.
2, the older the more money
Second-hand residential housing will be cheaper than new residential housing in the same location when sold, because there is a depreciation factor in second-hand housing. And commercial real estate is not so, the general mature business district needs two to three years of cultivation period, once the business district is mature after the commercial real estate rent will grow year by year, commercial real estate will be more and more valuable, so commercial real estate does not exist in the second-hand need to depreciation of the argument. In addition, the second-hand housing market is dominated by residential housing, second-hand commercial real estate is very little, because it is already a mature commercial real estate, very few people are willing to sell, so commercial real estate is the older the more valuable.
3, high stability
Commercial real estate service life in more than a few decades, buy commercial real estate, not only does not fall, but also more valuable, for commercial real estate this higher value of fixed assets, people tend to tend to buy up not to buy down, do not look at the purchase of commercial real estate is hundreds of thousands of dollars out of the hand, and the money has not disappeared, but only by the banknotes converted into a fixed asset in the need for money, the time, there is a lucrative rent every year, the time, the time, the time, the time, the time, the time, the time. When you need the money, you will get a good rent every year or sell the commercial real estate, and the money will come back. People who buy commercial real estate complain on the lips that prices are too high, but in reality they hope in their hearts that prices will continue to rise after the purchase.