I’m curious about how you calculate your annual property investment returns.
Do you factor in costs like maintenance, insurance, and substantial property taxes in your computations?
I include maintenance, insurance, and taxes, but determining unexpected costs can be tricky. I’ve found that periodic reviews help refine projections. How do you adjust when overlooked expenses sneak up on you? Curious to hear more on your strategies.
My approach to calculating annual yields involves first estimating a realistic net operating income by subtracting all operating expenses such as maintenance, insurance, and property taxes from the gross rental income, while leaving some leeway for unexpected costs. I rely on historical performance to make adjustments, ensuring that any market fluctuations or unforeseen expenditures do not skew the yield projections. This thorough method not only provides a clearer picture of the actual returns but also aids in making informed decisions when selecting new properties.
my calcs are rough - i typically deduct maintenance, taxes, and unexpected repairs from gross income. sometimes i miss a few costs, but iterating over time helps me refine the yield estimations. it’s a constant learning process in real estate.