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3 Important Calculations Every Orange County Real Estate Investor Needs to Know

3 Important Calculations Every Orange County Real Estate Investor Needs to Know

Real estate investing is really about creating future cash flow. When searching for investment properties, you need tools to help you compare what is available and determine which best meets your income goals vs. the investment risk. It’s wise to consult with trusted family and friends or reach out to professionals to guide you as you dive into your new business venture as a real estate investor. Just remember that, like a cog in the wheel of real estate investments, just like location can add long-term value, property management plays a pivotal role in the success and health of your real estate holdings. When reviewing the books, you should understand that, at the very least, you’ll need to match their performance as a landlord to achieve the same results. 

As a real estate investor, you must focus on earning the highest investment returns or ROI.  

To ensure you are making the greatest possible returns on every deal, we will discuss the numbers that play a key role in the outcome of an investment. Professionals are intimately familiar with the calculations that help in this task. For example, cash flow helps to determine the monthly income you’ll generate. Likewise, the cap rate determines the current market value and cash-on-cash return to understand the difference in return on your investment dollar of each potential investment. So read on as we explore three important calculations every Orange County real estate investor needs to know. Please note that this article is for informational purposes, not financial or legal advice.

Cash Flow

The number one goal of real estate investors is positive cash flow: cash flow or the net income generated from your rental properties after covering all of your monthly expenses. As a bonus, your cash flow from the property will increase as you pay down the mortgage over time. Savvy investors understand that rental income provides security for your lifestyle throughout your retirement years. In addition, rental income protects against inflation because rental rates tend to keep pace with the increased cost of living. Professional investors like those at H&M Realty Group can help you navigate the numbers for the potential income and expenses to help you understand the process of this critical calculation every Orange County real estate investor needs. The professional investors at H&M Realty Group can help you find the best location to ensure long-term value and higher returns yet stay within your working budget comfortably, leaving room for unexpected expenses.

Cap Rate

A cap rate is a tool wise investors use for comparing properties when adding to their real estate portfolio. The cap rate measures the expected rate of return based on the annual rental income. You can determine the cap rate by the ratio of the net operating income to the current market value, which helps sort the good deals from overpriced ones. Professional investors like H&M Realty Group are seasoned pros at determining the potential return on investments ROI or the losses you can expect when comparing properties to purchase. The professional investors at H&M Realty Group will help point the way for you as you learn the important calculations every Orange County real estate investor needs.

Cash on Cash Return

Most importantly, the cash-on-cash return formula will show you how hard your money is working for you by telling you how much money can be earned based on your invested cash. This calculation does not use the total cost of the asset, only the amount of cash you would put into the deal. Cash on cash return is a ratio between the annual net operating income and the total cash investment. It is one of the essential calculations every Orange County real estate investor needs to know. Professional investors like those at H&M Realty Group can help you understand the results when you compare investment properties. The professional investors at H&M Realty Group can guide you to the best investment property available in Orange County.

The professional investors at H&M Realty Group know all the important calculations every Orange County real estate investor needs. And the professional investors at H&M Realty Group know the local market because we are your neighbors here in Orange County. When you work with professional investors at H&M Realty Group, you’re working with a local full-service in-house team of industry specialists who work with an investors mindset, saving you time, money, and headaches. The professional investors at H&M Realty Group bring it all to the table, including every pro needed to make real estate investing easy and efficient. At H&M Realty Group, we handle it all, from locating investments and running the numbers showing you the ropes of the real estate investment business all the way to the closing table. You can also rely on our highly regarded property management team at H&M Realty Group to take on as many of the duties of a landlord as you like, from tenant screening to on-site management of large complexes. Call H&M Realty Group at 949-625-4533.

Joe

Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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