If you are purchasing an investment property, you will want to perform a financial analysis to determine if it is a good investment. A good investment is a comparison to other investments similar or different that proves to show a positive cash flow or increase in value over some time.
Let's consider a six-unit multi-family investment property I have for sale on Randolph Street in Napa. Is this a good investment? How does it compare to other multi-family investments, other real estate investments, and different types of investments such as stocks, bonds, or CDs?
Let's work on simplifying the various steps to analyzing investment real estate.
Objectively determining the market value
The income produced from an investment property directly affects its market value. Generally, the rent less the operating expenses gives us the income. If the rent increases typically, so does the value. If the expenses increase the value decreases.Read More