Investment Property Guide

Investment Condo Valuation

If you buy a condo and put it up for rent, what kind of cash flow can you expect? If the condo appreciates, what is the total return on your cash invested?

Use the following formula to determine the answer:

-                     Estimate the monthly cash flow, based upon the down payment, interest rate, historic rental income, estimated expenses, etc.

-                     Calculate the annual appreciation rate for the specific condo complex (based on actual sales).

-                     Calculate the total return on the cash you invest (down payment plus any negative cash flow) vs. the cash you receive when you sell (less selling expenses).