ProAPOD®

Real Estate Investment Software Blog

There are four basic returns inherent in real estate investment property that can make a real estate investor money. We’ve already discussed cash flow and appreciation, let’s consider the third: loan amortization as it applies to a mortgage on an investment property.

I’m flattered that many of you are asking whether or not you’re permitted to post my real estate investment articles in your own newsletters. The answer is, Yes. I’m always glad to freely share real estate investing information with customers, subscribers, and the real estate community as a whole. All I ask in return is to be given credit for the authorship and a link back to the ProAPOD website.

The prudent real estate investor always considers several basic returns to determine the potential benefits of purchasing, holding on to, or selling an income property investment. We’ve already discussed the importance of cash flow, and now for this second part of our multi-part series on how an income property investment makes you money, we’ll look at appreciation.

ProAPOD has updated Basic 6.0 and CFA 7.0 real estate investment software in response to a suggestion made by a new user recently about the “Cost of Acquisition” portion of the Loan Information Form (”LoanInfo” form). Seemingly there was some confusion on her part about how to complete it, so I modified it.

The successful real estate investor never regards a real estate investment like an immediate member of the family. Real estate is not purchased, held, or sold on emotion; it’s not love that compels, it’s all about a return on investment. So the prudent real estate investor will always consider several basic returns to determine the potential benefits of purchasing, holding on to, or selling an income property investment. And being able to understand these investment decision basics, where they come form, and how to calculate them is at the root of real estate investment success.

If you’re a real estate investor, and you’re planning to sell an income property owned for more than one year, you’re probably aware you will pay a capital gains tax. What you might not be aware of is the depreciation recapture tax you will also pay, and may be in for an unpleasant disappointment.