What is turnkey real estate?
Turnkey real estate is a property that is ready to be rented out immediately upon purchase.
What is Return on Investment (ROI)?
ROI stands for Return on Investment, which is a method to measure the performance of an investment. To calculate your profit, take the the total return on investment and subtract the cost of the investment. To calculate that as a percentage, take the net profit and divide it by the cost of the investment. Example:
What is Cash on Cash Return (CoC)?
Cash on Cash Return (CoC) is the cash income returned on the cash invested. To calculate the cash on cash return, take your net cash flow (after all expenses) and divide it by the cash initially invested. Example: $100,000 property purchase $30,000 cash invested for down payment, closing costs, rehab, etc.. $12,000 Annual Gross Rent
What is a Cap Rate?
A cap rate is the rate of return an investment is expected to generate based on the income received. A higher cap rate is a higher ROI and sometimes that also sometimes means more risk, a lower cap rate is a lower ROI that also sometimes means less risk. To calculate this number, divide the
What is Net Operating Income (NOI)?
Net Operating Income is the income you receive after all expenses are paid. Example: $12,000 Rent Received Annually (this is the Gross before you remove expenses) $6,000 Annual Expenses (including debt service, taxes, insurance, property management fees, vacancy, maintenance, etc..) $6,000 Annual Net Operating Income after all expenses are taken out
What is Straight Line Depreciation?
Straight line depreciation is the most common type of depreciation accounting method used to reduce the value of an asset gradually over a number of years, typically 27.5 or 39 years.
What is a 1031 exchange?
A 1031 exchange is when you can defer your capital gains taxes by selling and acquiring a "like kind" investment property within a certain period of time.