Posts in category 'Investors'

Investment Property is Real Estate Purchased for the Purpose of Renting.
Investment property is generally considered property held by the owner to earn rent, or acquire gains through capital appreciation, or both.  For the typical buy-hold investor it's both - rent and capital appreciation.

Total Return = Cash Flow + Loan Principal Pay Down + Value Appreciation.
Investors view and financially model investment cases on a total return basis.  Cash flow is rental income less all your expenses, mortgage payments, repairs and maintenance, taxes, insurance, etc. - essentially the money left over after all bills are paid.  Principal pay down is the declining loan balance with each mortgage payment.  Appreciation is the increase in property value over time.  These three financial elements added together create the total return.

Investment Property Produces Highest "Risk" & "Work" Adjusted Returns.
In my opinion, there is no better return on a "risk", "work", and "time" adjusted basis.  One can consider the returns produced by limited and opportunistic stock trades, or an exotic investment like options - which is the reason I mention "time" and "risk" adjusted.  Someone else can point to the returns from starting a business that is scalable and saleable, but that's an incredible amount of work which generally cannot be done in combination with a full-time job.  Yes, landlording is some risk and work, and is also the best return on an adjusted basis compared to other investments.

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