Patrick Iturra Report, EIG Asset Manager
This begs the question: what is a good ROI for a rental property?
This begs the question: what is a good ROI for a property? There is no clear answer to this one, like other real estate questions. The most common answer is “it depends on several factors, including the location of the investment, the type of property, the conditions, the risks, etc.” This information is not a sufficient answer for a serious real estate investor.
This brings us to our question: what is a good ROI for real estate investors? You’ll also get different answers if you’re calculating ROI using a specific formula. After all, the word “good” is subjective, and other investors have different criteria on which they base what they consider reasonable. Therefore, you might think 7.2% is a good ROI, while another real estate investor with a riskier investment would disagree. However, most experts agree that, on average, anything greater than 15% is a good return on real estate investment.
Real estate investors have been known to use mortgages, which are a form of leverage, to increase the return on their investment. This tells us that if you were to finance an income property with a mortgage, you could expect to get a higher ROI than if you had to pay for it entirely in cash. Consequently, investors need to consider their method of financing when answering what a good ROI on a rental property is. It is not very accurate to say that a good return on a cash investment is also suitable for a mortgage-financed investment property.
What is a good ROI for cash investments? This is a good question:
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