Financial Management Rate of Return: The Meaning and Calculation

August 13th, 2010

Financial management rate of return (or FMMR) is a return that was conceived (I do believe) by the Commercial Investment Real Estate Institute (CIREI) and is taught to students seeking the CCIM (Certified Commercial Investment Member) designation. So I’ll give the CIREI the credit for the financial management rate of return with the reservation that I might be mistaken and it originated elsewhere. Fair enough.

Cash Flow Analysis – Smart Advice for Computing Operating Expenses

July 29th, 2010

The cash flow of rental income property is what any investor engaged in real estate investing wants to determine. How much cash (both before taxes and after taxes) will remain after the property’s operating expenses and mortgage payment is deducted from the rental and other income generated by the property? In other words, will the property ultimately produce enough cash during any given year for me to pocket some of it (and perhaps invest it elsewhere) or have to feed into it (out of my personal funds) to keep the property running?

Why Cash Flow is Paramount to a Real Estate Investment

July 15th, 2010

The starting point for any investor making a real estate investment decision is a study of the overall market and supply and demand factors in specific cities and towns. Whether for speculative purposes or part of a long-term strategy, investors are never willing to engage in real estate investing unless the financial climate agrees.

Useful Rental Property Valuation Calculations

July 13th, 2010

Two calculations often made by appraisers using the income approach to valuate rental property involve the profit margin and break-even ratio. In this article I will explain and show the formulas for both.

Real Estate Investing Can Profit or Lose You Money: You Choose!

June 7th, 2010

There is no such thing as a “no-brainer” in real estate investing; it’s all about the numbers. And when you understand what real estate investing is and are serious enough to do it by the numbers (not by the seat of your pants) then investing in real estate can pay you big dividends; otherwise you lose money or would have to consider yourself lucky.

What Not to Neglect When You Start Real Estate Investing

May 25th, 2010

Real estate investing provides no guarantees. Whereas in some cases real estate investing has made some investors very wealthy, it has also (not unlike any business venture) left many others disillusioned; primarily because it didn’t make them wealthy, and in some unfortunate cases, even lost them money.